Mumbai, 18 May (Commoditiescontrol): Gold posts a second consecutive weekly gain, driven by increased expectations of interest rate cuts. Spot gold rose 0.3% to $2,384.08 per ounce, marking a 1% rise for the week and reaching a one-month high on Thursday. This upward trend has also bolstered silver and platinum prices, which are up 5.5% and 6.6%, respectively, this week.
A key factor in this rally is the anticipation of sustained strong retail demand in China. The Chinese government's new measures to stabilize the beleaguered property sector have further fueled optimism. China's robust retail demand has significantly contributed to the recent surge in gold prices. Market analysts are closely watching if the high prices will cause central banks to slow their gold purchases. This comes as outflows from physically backed gold exchange-traded funds persist.
In 2022-2023, global central banks actively purchased gold, with China being the largest buyer. However, in April, China's central bank reduced its gold buying when spot prices hit a record high of $2,431.29.
The 15% rise in gold prices since the beginning of 2024 has ensured strong profit margins for gold miners. According to the World Gold Council, the global average total expenses for gold miners were $1,342 per ounce in the last quarter of 2023.
Silver and platinum have also benefited from higher gold and base metal prices. Spot silver increased by 0.4% to $29.71 per ounce, after reaching a three-year high and nearing the significant resistance level of $30 in the previous session. Platinum rose 0.2% to $1,059.15 per ounce, hitting a one-year high on Thursday. The metal's 6.6% weekly gain is attributed to continued structural deficits in supply.
Conversely, palladium experienced a decline, dropping 1.3% to $980.91 per ounce. The metal faces pressure from the growing market share of electric vehicles, which reduces demand for palladium in catalytic converters.
Overall, the precious metals market is witnessing notable movements, with gold, silver, and platinum showing strong performances while palladium struggles amid shifting automotive industry trends.
(By Commoditiescontrol Bureau: 09820130172)
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