After four consecutive weeks of decline, there was some decline in gold prices and closed in the green zone on Friday. The yellow metal gained traction as the US dollar (USD) retreated from a 20-year high, making the precious metal less expensive for other currency holders. A weak Indian National Rupee (INR), which tested new lifetime lows, helped gold with additional gains on domestic exchanges such as the Multi Commodity Exchange (MCX). Moreover, a sharp fall in global equities amid concerns about global economic health fueled the metal’s safe-haven appeal.
speaking on important gold price Triggers that could determine gold price in the near term, Vipul Srivastava, Research Analyst – Metals & Energy Research at Religare Broking Ltd. said, “Key to look at the dollar’s momentum to gauge gold’s direction next week. Highlights will remain the focus while the performance of riskier assets will be on the radar. On Wednesday, the Fed will release the minutes of its latest meeting, watched eagerly by market participants to gain further clues about interest rate hikes in the US Later, we will have US first quarter GDP data, which will provide an insight into the economy and determine the bullion going forward.”
Here we list down the top 5 triggers that can decide the price of gold in the near term:
1]Dollar Index: The volatility in the dollar will be noticeable as the dollar index has declined from the level of 105 to around 103. A further fall in the dollar index could boost demand for the precious metal.
2]US GDP First Quarter Figures: Anuj Gupta said, “The US Gross Domestic Product (GDP) figures for the first quarter are expected on Thursday, 26 May 2022, i.e. next week. It could be even faster.” Vice President – Research at IIFL Securities.
3]US Fed Meeting: The officials of the Central Bank of the United States of America are going to meet on Wednesday next week. Though they have already announced that the interest rate will be cut by 50 basis points, more clarity will come after the meeting.
4]Rupee Vs Dollar: Recently, the Indian rupee hit its all-life low, which put some pause on the rally of gold. If the rupee regains its lost ground in the times to come, then this domestic trigger could lead to some further rise in gold prices.
5]Energy Prices: “Rising energy prices continue to be a concern, which could again boost demand for gold as a hedge against inflation. The growing prospect of an EU embargo on Russian oil imports, and in lockdown restrictions in China The easing may further boost the demand for oil prices,” said Vipul Srivastava of Religare Broking.
Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint.