Synopsis

Gold prices surged past Rs 1.48 lakh per 10 grams on Friday, propelling shares of gold financiers like Muthoot Finance and Manappuram Finance up by as much as 5%. This rally was triggered by weaker-than-expected US jobs data, which cooled inflation concerns and reduced expectations of an imminent interest rate hike by the US Federal Reserve.

The shares of gold financiers like Muthoot Finance, Manappuram Finance and IIFL Finance jumped up to 5% on Friday as gold prices jumped back above Rs 1.48 lakh per 10 grams.

Gold futures with August expiry on the Multi Commodity Exchange of India (MCX) gained around Rs 2,288 per 10 grams, or nearly 2%, hitting the day’s high at Rs 1,48,046 per 10 grams. The contracts with October expiry comfortably soared above Rs 1.5 lakh per 10 grams.

Gold hit its highest level since June 23 in the international market, with spot gold rising more than 1% on Friday morning. This came as weaker-than-expected nonfarm payrolls and private payrolls data tempered concerns around inflation and higher-for-longer interest rates.

Why are gold prices rising today?

Also read: Gold price at Rs 1.47 lakh/10g; silver gains Rs 5,000/kg as US jobs data cools inflation worries. What are experts saying?

"The figures challenged the narrative that the Fed remains on track to hike in the second half of this year," Reuters quoted Westpac analysts as saying in a research report. The tepid jobs data doused traders' expectations of an imminent rate hike and raised the odds that the Fed will keep rates on hold until October.Traders are now pricing in a 46.8% probability that the U.S. central bank will keep rates steady at its meeting on September 15 to 16, compared to a 35.8% chance a day earlier, according to the CME Group's FedWatch tool.

Notably, this boosted gold prices today as higher interest rates typically weigh on non-yielding gold, as they make interest bearing assets more attractive. Silver prices also sharply gained today, rising more than 2% to near its highest level in more than a week.

Also read: Jewellers may be louped in for idle gold mobilisation

Why are gold financier stocks rising today?

On the MCX, Jain said gold has support at Rs 1,44,400-Rs 1,43,350. The yellow metal will likely find resistance at Rs 1,47,100-Rs 1,48,800 levels, according to the analyst.

(With inputs from agencies)

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

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