Gold price today: Dollar continues to drag yellow metal rate. Good time to buy?

Gold price today: Due to the dollar index rising to two decades high, the gold price continued its losing streak for the fourth week in a row. On the Multi Commodity Exchange (MCX), the gold price closed on Friday at 49,909 per 10 grams, a weekly loss of about 2.86 percent. The spot gold price closed at $ 1810 per ounce, which violates key support placed at $ 1820 levels.

According to commodity market experts, investors are parking money in the US dollar and US bonds as they move out of the precious metal amid fears that central banks’ monetary tightening and the protracted war between Russia and Ukraine would paralyze global economic growth. They said that the dollar index has reached a new two decades high and therefore this trend is expected to continue in the short term. In the short term, the spot gold price can go up to $ 1780 per ounce while the MCX gold price can go up to 48,800 per 10 g levels. They advised precious metal investors to wait a while and buy gold at around key support levels of $ 1780 in the spot market and 48,800 levels on MCX as broader prospects for gold are still positive.

Speaking about the reasons for the gold price correction, Sugandha Sachdeva, VP-Commodity & Currency Research at Religare Broking Ltd, said: “In tandem with the risk-off sentiments seen in the broader financial markets, gold prices were also set for a losing streak, where they fell 2.86 percent to a three-month low, hitting their fourth straight week with losses.The main headwind behind the fall in the gold price was the impressive rise in the dollar index to a new high of two decades.Investors preferred to park their money in security “for the US dollar and US bonds as they move out of the precious metal amid fears that central banks’ monetary tightening path and the protracted war between Russia and Ukraine would paralyze global economic growth.”

“According to the latest data, the US consumer price index eased slightly compared to March but climbed more than expected with an annual increase of 8.3 percent in April. As inflation remains stubbornly high, markets price another 50 bps rate hike at the US Federal Reserve meeting in June But the significant depreciation of the Indian rupee, which pushed to a record low of 77.63 marks during the week, provided some dampening to domestic gold prices, says the Religare expert.

Pritam Patnaik, Head of Commodities – HNI & NRI Acquisitions at Axis Securities, reiterates Sugandha Sachdeva’s views: “The precious metal seems to have developed a Teflon coating, where potentially all positive developments or news seem to slip away immediately, without affecting its traded prices. With the broader financial and geopolitical environment ripe for a haven alternative such as gold, flows have moved against the dollar index, reaching its 20-year high on yesterday’s trading day, pushing gold prices to a low of $ 1,810. Furthermore, Fed Chairman Jerome Powell confirmed that “The central bank is ready to raise interest rates by 50 bps in each of the next two policy meetings. Powell also promised that the Fed was prepared to do more to curb rising inflation.”

The Axis Securities expert went on to add that the basic background benefits the USD bulls and suggests that the recent downturn in gold prices may still be far from over.

Speaking about the gold price outlook, Sugandha Sachdeva of Religare Broking said: “As for the price outlook, the yellow metal has broken the $ 1820 per ounce key support and is likely to slide lower towards the $ 1780 per ounce mark, while for domestic markets, gold prices appear to be against the key support for 48,800 per 10 g. Although prices witness an intermittent phase of correction, we feel that the broad trend remains positive in gold as long as the level of 48,800 per 10 g holds on an outgoing basis. “

In his advice to positional gold investors, Sugandha Sachdeva said: “In the near future, it is advisable to wait for a few more declines and buy gold around the key level for 48,800 per 10 g. On the higher side we see a recovery in the precious metal against 51,200 per 10 g initially and then 51 800 per 10 g in the coming days. “

Warning: The views and recommendations above are from individual analysts or brokerage firms, and not from Mint.

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