Gold price today at 11 month low Should you buy or wait for more correction?

According to commodity market According to experts, gold price is expected to remain under pressure as speculation is high about a 75 bps hike in interest rate by the US Fed after US inflation hit a 41-year high. He said immediate support for spot gold has been placed at $1675-80 an ounce level and it is likely to move towards $1620 an ounce level in the near term. Gold prices are expected to get strong support on MCX 48,800 while The yellow metal will remain limited above the 51,500 level.

Speaking on the key constraints for gold prices, Sugandha Sachdeva, Vice President, Commodity and Currency Research at Religare Broking, said, “This was the fifth consecutive week of fall in gold prices, with the precious metal sliding to a one-year low internationally. Markets, though a sharp depreciation in the Indian rupee still dampened domestic gold prices to some extent. Major headwinds for gold The dollar index has seen continued strength to hit new two-decade highs. US annual consumer prices rose 9.1 percent in June, the highest in nearly four decades, against expected 8.8% growth, indicating that inflationary pressures in the US economy are enormous. Large interest rate hikes have raised the stakes, providing an upward thrust to the dollar index. Markets are now pricing in the possibility of a rate hike of 100 bps compared to earlier expectations of 75 bps. increase as the Fed can move up a gear, which Runaway focuses its attention on battling price pressures. This has affected the investment appeal of the precious metal.”

Religare experts further said that the Bank of Canada also surprised markets by raising the rate by a full percentage point this week in an effort to contain inflation, while New Zealand’s central bank raised its benchmark rate by 0.50 per cent, and so did the Bank of Canada. Korea did.

Dollar index gold prices fall

On how dollar index is driving down gold prices, Sugandha Sachdeva of Religare Broking said, “Higher interest rates increase the opportunity to hold non-yielding gold and encourage investors to take refuge in dollar gold. Prices have eased. Despite a risk-averse environment and chatter around rising bearish risks, were largely impacted by higher interest rate projections. However, the growth outlook from excessive rate hikes and will ignite the safe haven appeal of gold from a medium to long-term perspective, while lower levels will make it more attractive.”

Anticipating further weakness in gold price, Pritam Patnaik, Head – Commodities – HNI & NRI Acquisitions, Axis Securities said, “The much awaited price buy in gold is still elusive, as the chorus for weak gold price is very much. Turns bullish. Markets seem confident that gold prices may slide below the $1700 level. However, chances remain high on broad expectations that the Fed is well on its way to raising rates by 1% could, which in turn would make a non-interest-yielding asset like gold, look much less attractive. To add to the pledge of gold, the rising dollar has reduced the attractiveness of gold. While the dollar index reaches a new 20. -Experiencing a short-term correction phase year after year. Thursday’s high of 109.30. The asset continues to refresh its highs, reflecting the strength of global DXY bulls.”

Experts at Axis Securities further said that DXY has slipped near the crucial support of 108.60 and may resume its upward journey after retesting the round-level resistance of 109.00, resulting in further pressure on gold prices. Will happen. With an extremely bullish approach adopted by the Fed, gold’s prospects do not look great.

Gold Price Outlook

“The coming weeks are expected to be volatile for gold with a downside bias. That said, gold prices seem to be falling towards the demand zone, which is in a narrow range of $1680 to $1688. We are looking at these levels. But we can see some buying, said Pritam Patnaik.

Expecting gold price volatility with negative trend in near future, Sugandha Sachdeva said, “Near term trend looks downward sloping where prices are seen nearing their key support at USD 1675-80 per ounce. Looks weak to fall towards the area. Has been protecting the gold prices for the past two years. If the prices manage to stay above the same, there is a strong possibility of a correction in the prices, which will propel the dollar index. A move to the close of the current week is very likely. However, any decisive close below the same area would pave the way for a further downside towards the $1620-1580 per ounce area. For domestic markets, prices are likely to turn lower, but a Strong floor is likely to be found 48,800 per 10 gram area, while 51,500 per 10 grams area will limit the upside in gold prices in the coming days.”

Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint.

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