Gold price is at life time high today. Should you be buying the current rally?

According to commodity market Experts, lower-than-expected US economic data and the dollar index hitting a 7-month low boosted gold’s appeal as a safe-haven. He said that despite the huge increase in gold prices, they will remain positive till the time the yellow metal remains above the price. 55,500 level on MCX. In the short term, he expects gold prices to rise 57,500 level. However, he advised gold investors to keep an eye on the dollar index, which is taking strong support near 101 levels and any pullback in the greenback could lead to profit-booking in the bullion asset.

Reasons for the rise in gold prices today

Talking on the triggers supporting the attractiveness of gold among investors, market expert Sugandha Sachdeva said, “Gold prices continued their steady rise as they hit a new record high. 56,850 per 10 grams in the domestic markets, an increase of about 0.54 per cent for the week. A depressed dollar index hovering near a seven-month low continued to support gold prices, while less-than-expected US economic data raised concerns that the economy was losing growth momentum and gold as a safe-haven. has increased the attractiveness of Retail Sales biggest drop in a year manufacturing production The biggest decline seen in 2 years, and existing home sales fell to a 12-year low last month.

Sugandha further said that US Fed officials have highlighted the need to raise interest rates further and keep them higher for a longer period of time, even as inflation appears to be calming down. However, gold prices gained amid expectations of a slower pace of rate hike by the US Fed this year. Markets are now pricing in 0.25 percentage points growth In the lending rate at the next monetary policy meeting of the US central bank.

Dollar rates in focus

Advising investors to keep an eye on the dollar index, Anuj Gupta, Vice President – Research, IIFL Securities said, “Dollar index falling to 7-month low and disappointing US economic data are the immediate reasons for the rally in gold prices. But, one needs. to track physical demand of precious metal and dollar index. physical demand in domestic market is expected to increase due to upcoming wedding season, but major trigger will be dollar index. if it hits 101 level breaks your immediate support, then some may Spicy In case of an upside move in the yellow metal while a rally in the dollar index, profit-booking may start among gold investors.”

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Anuj Gupta IIFL Securities Spot gold is taking immediate support at $1,885 while it is facing resistance near $1,950 and $2,000 an ounce, it said.

gold price outlook

On what lies ahead for gold investors, Sugandha Sachdeva said, “Even gold prices look very bullish from a short term perspective, as long as they remain on the uptrend. 55,500 per 10 grams, the near term trend remains positive. Prices may test on the higher side 57,500 per 10 grams. On the contrary, dollar index has significant support at 101 mark and any meaningful rally in greenback can change the dynamics of gold and lead to profit-booking. Having said that, the near-term trend will still hinge on the Fed’s monetary policy action early next month.”

Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint. We advise investors to check with certified experts before taking any Investment Decision.