Gold prices continued to fall for the third week in a row as prospects of an aggressive rate hike by the US Federal Reserve put the bullion back on track. According to commodity market experts, gold remains under pressure due to the dollar index remaining at a 20-year high.
Dollar index, global inflation, Russia-Ukraine conflict, Covid cases in India and fiscal stimulus in China are some of the major triggers. gold prices For next week according to experts.
“For the coming week, investors will turn their eyes to inflation data from the US. The inflation trajectory remains central to determining how far the rates will need to be raised. At the same time, markets will remain closed to monitor dollar movement as it will lead the way for gold. While the Russia-Ukraine conflict shows no positive developments, rising energy prices will also be on investors’ radar. Sugandha Sachdeva, VP, Commodity and Currency Research at Religare Broking Ltd, said markets are expecting some fiscal stimulus measures by China in its effort to boost the economy.
While gold is regarded as an inflation hedge, high US interest rates increase the opportunity cost of holding zero-yield bullion. Gold is considered a safe store of value during global uncertainties such as the Ukraine war.
“Gold will remain a preferred asset class as long as uncertainty over the Russia-Ukraine conflict continues and will continue to attract investment as a proven hedge against other asset classes. Gold prices are subject to geopolitical risks and inflation in the global environment.” The pressure will continue to provide support. We continue our neutral stance on gold and recommend a ‘buy-on-dips’ strategy,” Axis Securities said.
The views and recommendations given above are those of individual analysts or broking companies and not of Mint.