Gold, silver price on 16 May 2024: Yellow metal prices fell 0.4%, silver marked an all-time high, hovering above Rs 87,000

Gold prices on the MCX hovered at Rs 72,90773,128 per 10 grams on Friday, hitting an intraday low of Rs 72,833. In the international market, prices maintained a similar trend, hovering around $2,383.73 per ounce. This indicates a certain level of stability in the gold market.

Meanwhile, silver hovered at Rs 87,110 per kg and hit an intraday low of Rs 86,900 on the MCX. In the international market, the price hovered around $29.70 per ounce.

Kaynat Chainwala – Senior Manager, Commodities Research – Kotak Securities, says, "COMEX Gold prices fell 0.4% on Thursday as hawkish comments by few Fed officials tempered optimism regarding rate cuts. Federal Reserve Bank of Richmond President Thomas Barkin and his New York John Williams reiterated that US central bank needs to keep borrowing costs elevated for longer to lower inflation to its 2% target, hinting that just one softer inflation reading won’t be enough to prompt rate cuts. Investors now look ahead to speeches by Fed officials today as more hawkish remarks may push traders to recalibrate rate cut bets."

Manav Modi, Analyst, Commodity and Currency, MOFSL, said, "Gold prices inched higher hovering near $2400 while silver marked an all-time high on the domestic front, amidst soft inflation data pulled the dollar to one-month lows and pushed up expectations of interest rate cuts. Since the start of this month, there have been weak economic data points like the US jobs market, inflation, retail sales and a few housing numbers."

The US CPI and Core CPI were both reported lower than the previous month by 0.1% and 0.2%, respectively. In the previous session, weekly jobless claims were reported better than expectations; similarly, housing starts and building permits showed signs of weakness, supporting bullions.

The CME Fedwatch tool showed traders pricing in a greater chance of a 25 basis point cut in September, at nearly 54%. Still, a slew of Fed officials warned over the past week that the central bank needed more confidence that inflation was going down. A sharp rally in industrial metals also has supported an up-move in silver prices. Today, the economic calendar is fairly light regarding the US; however, focus will be on EU CPI and comments from Fed officials.

Jateen Trivedi, VP Research Analyst Commodity and Currency, LKP Securities, said, "Silver prices soared to unprecedented levels, surpassing 87,000 in MCX, driven by a weaker dollar and declining Treasury yields. The uptick in silver prices followed reports of slowing US inflation, fueling expectations of a Federal Reserve interest rate cut in September. Demand for silver remains robust, especially in the electric vehicle (EV) and photovoltaic sectors, as consumption for EVs continues to rise, contributing to the bullish trend in silver markets."