Gold Price Outlook: Gold and silver prices closed on a negative note last week as the dollar strengthened after the US Federal Reserve hiked interest rates. On MCX, gold fell by 0.42 per cent, while spot gold fell around 0.72 per cent during the period. However, bullion experts are expecting that weak US consumer sentiment data and bearish fears may support gold and silver prices. Although there is no central bank meeting next week, plenty of economic data has been released from the US, Europe and Japan that will provide further insight into the global economy and propel gold prices. Key data in focus will be US GDP Q1 data, G7 summit 2022, dollar index and OPEC+ meeting.
Here we are listing down the top 5 triggers that can decide the price of gold next week:
1]G7 Summit 2022: “The meeting is scheduled for next week 26-28 June and the whole world will watch this event carefully as further escalation of geopolitical tensions regarding the Russo-Ukraine war and Sino-Vietnam relationship could lead to a sharp jump in gold prices. ” Anuj Gupta, Vice President – Research, IIFL Securities said.
2]Dollar Index: “Next week, a lot of triggers will determine the trend of gold prices. The first key variable will be the movement of the dollar index as it competes with gold as a safe store of value. Market participants are trying to figure that out. Whether it is not or not. Central banks will aggressively raise rates amid rising risks of a global recession, which will put some pressure on the greenback. The US dollar saw its first weekly decline in June, where it is finding it difficult to break the 105 mark And any further downside in the dollar will support gold prices,” said Sugandha Sachdeva, vice president of commodity and currency research at Religare Broking Ltd.
3]OPEC+ meeting: “Next week, attention will turn to the next week’s meeting of OPEC and allies, where they will discuss production levels for the grouping ahead. OPEC+ is broadly expected to increase oil production by 648,000 bpd in July and August. Based on the group’s production policy, a sharp move in crude oil prices will impact inflation expectations and precious metal prices, said Sugandha Sachdeva of Religare Broking.
4]US GDP Q1 Data: “US Gross Domestic Product (GDP) data for the first quarter is expected next week. If the numbers are disappointing, speculations of a slowdown in the US economy will further strengthen the demand for safe havens. Investor Anuj Gupta of IIFL Securities said, “It is advisable to keep an eye on the US GDP Q1 data coming next week.”
5]Rupee Vs Dollar: Last week, the Indian National Rupee (INR) touched a record low which acted as support for the fall in gold prices. As depreciation of rupee gives rise to gold prices, investors are advised to keep an eye on this important domestic trigger for the yellow metal.
Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint.