Gold price today: MCX yellow metal rate at 2-month low. Should you buy now?

According to commodity market analysts, the price of gold remained weak throughout this week as there is no possibility of a rise in gold prices on strong US bond yields. He said higher bond yields helped the US dollar rise against major global currencies in the forex market, providing gold investors with an additional option. However, he added that despite the weakness in the yellow metal prices throughout the week, spot gold remained above its support level of $1760 and is trading in a range of $1760 to $1830 an ounce.

trigger for gold price

Gold experts were of the opinion that there is little chance of a rise in gold prices in the next one to two weeks as the US Fed has announced that the rate hike may be sooner than expected. This tough stance by the US central bank has acted as a trend reversal for the gold price outlook and investors await the final results from this month’s Fed meeting.

Speaking on the reason for weakness in gold price today; Anuj Gupta, Vice President, Commodity & Currency Trade, IIFL Securities, said, “The weakness in gold is attributed to strong US bond yields, a rally in the forex market against the US dollar against major global currencies and the hawkishness of the US Fed. Stance on interest rate hike. The recent rise in US bond yields has helped the US currency appreciate against major global currencies in the forex market. This has given gold investors something to diversify their portfolios. Further, the recent US Fed’s expected announcement of a quicker-than-expected interest rate hike has acted as a trend reversal for the gold price outlook in the near term. Following the US Fed’s announcement, Commodity markets are anticipating that the Fed may announce an interest rate hike at its meeting this month, which is scheduled for January 25, 2022.

Anuj Gupta of IIFL Securities advises gold investors to keep an eye on US economic data coming out this week as it will indicate whether interest rate hike is coming in this month’s Fed meeting. He added that the US Fed may announce some more steps regarding bond tapering from the rising US data on inflation numbers and in that case panic in gold can be expected. However, any development in inflation control should be seen as a good opportunity for gold to rally.

Advice to gold investors to keep an eye on spot gold prices; Amit Sajeja, Vice President of Commodity Research at Motilal Oswal said, “Despite the weakness in gold price throughout this week, it has managed to maintain the level of $1760 an ounce, which is a good sign for the gold price outlook. Currently, spot gold price is trading at the level of $1760 to $1835 per ounce and weakness or bullishness can be considered for a breakout on either side of the range.

Anuj Gupta of IIFL Securities, unveiling the investment strategy for gold investors, said, “Till the US economic data comes, one should keep selling on the growth strategy. In the spot market, the range of $1815-1820.” The level should be viewed as an opportunity to sell while maintaining the stop loss above the level of $1835 per ounce while one should book profit at the level of 1780-1785 per ounce. One should be on the downside until the US economic date arrives. Buying should be avoided as gold price outlook for this period looks with negative bias.”

For gold investors in the domestic market; Sumeet Bagdia, Executive Director, Choice Broking said, “MCX Gold Rate has strong support 46,500 while it has strong resistance at 48,500 per 10 grams level. Any rally in gold can be expected only if it breaks it 48,500 hurdle while its support 46,500 is expected to remain intact till another trigger comes in domestic or international market. Ounces next target if spot gold price breaks the upper barrier.

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