Gold rates have risen after weak US GDP data. Right time to buy now?

According to commodity market According to experts, the US Fed changing its stance on interest rate hikes from hawkish to mild hawkish and weak US GDP data for the second consecutive quarter has pulled the dollar index below its 20-year high of $109.30. Bond yields have also declined following a softening dollar index and a softer stance by the US central bank. Hence, once again investors have started looking at gold as a ‘safe haven’. He said the overall trend for the yellow metal is expected to be positive and in the short term, gold prices in the spot market may go towards $1800 while it is expected to move higher, he added. 52,300 levels on MCX.

US Fed’s mild stance on interest rate hike

Speaking on the reasons behind the jump in gold prices, Sugandha Sachdeva, Vice President, Commodity & Currency Research at Religare Broking, said, “Gold prices rose around 2.39% for the week, while carrying forward the positive momentum of the previous week. US Fed’s mildly hoarse tone on rate hike. In a much-anticipated event, the US central bank hiked the rate by three-quarters of a percentage point for the second consecutive month in its fight against scorching inflation, widely anticipated. However, the Fed acknowledged a moderation in economic activity, which allayed concerns about the path to a faster rate hike and prompted safe-haven buying in gold. Moreover, the dollar index saw nursing losses for the second consecutive week, which pushed gold prices lower. ,

US GDP data

The Religare analyst further said the precious metal’s attractiveness has further boosted as US GDP likely contracted 0.9 per cent compounded annually in the second quarter, while the first of the three estimates is expected to grow by 0.5 per cent. , This follows a contraction of 1.6 percent in the first quarter. With growth accelerating amid mounting price pressures and tightening financial conditions, there is speculation that the Fed may back away from super-sized rate hikes earlier than expected to avoid a hard landing for the economy.

slide in dollar index

Anuj Gupta, Vice President of Research at IIFL Securities, said, “A change in US Fed’s tone on interest rates and contraction in US GDP for the second straight quarter triggered profit-booking in the currency markets. This has led the dollar index to fall below 106 points from a 20-year high of 109.30 within a fortnight. We are expecting the dollar index to fall below the level of 105 in the short term. He added that fears of a US recession and depreciation of the Indian rupee against the US dollar are expected to dominate gold prices in the near term.

Anuj Gupta of IIFL Securities said that the fall in the dollar is expected to push the gold prices higher and may go up to around $1800 an ounce level in the spot market while MCX expects to test the gold price. Is. 52,000 points in the near term.

Gold Price Outlook

Sugandha Sachdeva of Religare Broking, speaking on the outlook for gold prices for the near term said, “As far as prices are concerned, gold has managed to find a strong floor at $1,680 an ounce level and strong buying interest. Going forward, the outlook for the near term remains positive, and we expect the precious metal to move towards the level of $1785 an ounce initially and then $1810 an ounce, while in the domestic markets, The precious metal may move further. from 52,300 52,700 per 10 gram mark, with immediate support seen in coming days 50,200 per 10 grams, while the key will remain on the cushion area 48,800 per 10 gram mark.”

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

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