Gold investors, prepare yourself for yet another exciting week. Bullion will remain under pressure over the next few days as investors will carefully follow the inflation numbers for the United States, which is set for July 13.
On the Multi-Commodity Exchange (MCX), gold ended last week at Rs 50,810 per 10 grams, down over 2 per cent weekly. The US dollar had cooled from a two-decade high, losing some weight from the safe-haven metal.
The rising dollar price, US June consumer price data and the US Federal Reserve and future commentary on crude oil prices may decide the bullion price next week.
The US dollar dominates the gold price around the world. The price of gold is inversely related to the value of the US dollar. Investors have chosen the dollar over the precious metal amid rising bearish risk. It pushed the greenback to a two-decade high last week. Experts believe that the US Dollar will maintain this bullish momentum in the coming days. If the dollar rises, gold in other currencies will become costlier.
“MCX Gold prices are expected to trade with a negative bias amid higher dollar index. Gold price on MCX is trading below the average level of Rs 50,900. As long as it remains below this level, it is likely to correct towards the mean-2 sigma level of Rs 49,900 in the coming sessions,” ICICI Direct said in a note.
All eyes will be on US inflation data next week. Economists expect the consumer price index to hit a new 40-year high of 8.8 percent in June, according to a poll conducted by Reuters. However, the monthly core index is likely to decline to 5.8 per cent from 6.0 per cent in May.
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