Gold rate today: Gold surges to fresh record high of Rs 56,562 on MCX

Gold prices surged to a fresh record high on Monday, tracking gains in overseas markets. Gold futures traded at an all-time high of Rs 56,562 per 10 grams on MCX, up by Rs 238 from Friday's close of Rs 56,324.

In the global markets, spot gold climbed 0.3% to $1,926.07 per ounce, a near nine-month high. Meanwhile, US gold futures rose 0.5% to $1,930.30.

Gold prices have been on the rise in the New Year amid expectations that the US Federal Reserve would go slower on interest rate hikes after a slowdown in US inflation.

US consumer prices data showed a surprise decline in December, falling for the first time in over two-and-a-half years. Atlanta's Federal Reserve official Raphael Bostic recently said the inflation data may allow the Fed to scale back to quarter-point rate hikes at its upcoming meeting.

Further, a survey on Friday showed US consumers are becoming more confident that price pressures will ease considerably over the next 12 months, their one-year inflation expectations falling in January to the lowest level since the spring of 2021.

The US Fed raised key interest rates by 75 basis points (bps) four times last year, before slowing to a 50 bps increase in December. Most traders expect a 25 bps hike at the US central bank's next policy meeting.

The decline in the dollar index further boosted the yellow metal's rise. The dollar index slipped about 0.4%, and was marginally over 102. A weaker dollar makes the dollar-priced gold cheaper for buyers holding other currencies.

"Bullish sentiment in gold has also been supported by reports that China has boosted gold reserves for a second consecutive month. US Retail sales along with some housing data and the Bank of Japan monetary policy meeting will be in the spotlight for the week. Dollar weakness might persist, as market participants are ramping up bets that the Bank of Japan will exit its ultra-dovish stance as inflation accelerates and is expecting some policy tweaks. Overall trajectory remains on the upside for gold, amid the backdrop of the deteriorating global economy and a looming recession and stagflation risks,” said Ravindra V Rao, VP-Head Commodity Research, Kotak Securities.

Analysts expect the yellow metal to further trade higher towards Rs 56,610 levels.

"The opportunity cost of storing the non-yielding bullion increases due to the high vulnerability of gold to rising interest rates, despite the fact that it is seen as an inflation hedge. We expect gold to trade higher towards Rs 56,610 levels, a break of which could prompt the price to move closer to Rs 56,850 levels," said Prathamesh Mallya, AVP- Research, Non-Agri Commodities, and Currencies, Angel One.

"Fed remains the focus. The market is of the view that the Fed's rate-hike cycle is slowing and may come to an end soon, which is helping gold. Prices are seeing good support around the $1,900-$1,920 levels. The next key level of resistance will be around $1,970," said Ilya Spivak, head of global macro at Tastylive.

Meanwhile, silver was trading at Rs 69,788 on Monday, up by Rs 361 from its previous close.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)