MCX gold rate retreated from record high. Should you buy or wait for further downside?

According to commodity market According to experts, gold prices are in ‘sustained upside trend’ as US dollar index fell to a two-month low after the US Fed’s dovish stance on interest rate hike fueled speculation about a rate pause. got a boost. Apart from this, the rise in the prices of crude oil last week had also increased the concern about inflation. Experts said that $1980 and $1945 are the major support areas for the precious yellow metal in the international market. 59,700 per 10 grams and 58,500 per 10 grams is the major cushion for gold prices on MCX.

Why is the price of gold increasing?

Highlighting the reasons for the rally in gold price, market expert Sugandha Sachdeva said, “It is mainly weakness in the dollar index at two-month low and expectation that the US central bank is at the peak of its tightening cycle, which The yellow metal is continuing its upward trend, and even after the sharp run-up, some retracement was seen in the prices, closing above $2000 an ounce is indicating that the prices are on a rise. Getting ready to move on.

Sugandha further said a sharp jump in crude prices for the week as OPEC+ producers surprised the markets by announcing a fresh production cut of 1.16mbpd, again raising concerns about stagnant inflation globally Which is somewhat of a downside trigger for prices. This suggests that interest rates will remain high for a longer period of time to moderate higher and underlying price pressures.

Nirpendra Yadav, Senior Commodity Research Analyst pointing to weak US economic data Swastik Investmart said, “U.S. jobs fell below ten million in February for the first time in nearly two years, a sign that the Federal Reserve’s efforts to slow the labor market are starting to have an effect.” Declined opening to 9.93 million.”

Fear of inflation and recession

“The interest rate hike initiated by the Fed in May 2022 has now been signaled to halt as inflation in the US reached a 41-year high and the Fed’s main target to control it was the labor market. raised interest rates.” several times over the past year, which has so far not had a significant impact on the labor market. However, due to the increase in the interest rate, the possibility of an economic recession has increased in the United States and Europe, the impact of which is visible in the economic data of the United States,” said Nirpendra Yadav.

gold price outlook

Expecting bullish trend to continue in bullion market, Nirpendra Yadav of Swastika Investmart said, “Due to rising pressure on labor market, it is becoming more likely that Fed will not hike interest rates further, which will lead to rise in precious metals.” Has been made. “

Advising bottom fishing on every dip in gold prices, Sugandha Sachdeva said, “Decoding the price set-up, the $1980 level and then $1945 per ounce align as a key support area, while the domestic markets , 59700 per 10 grams and 58500 per 10 grams is the cushion level. On the upside, the prices are likely to navigate towards $2050 per oz initially and further upside move towards its all-time high of $2075 per oz is also on the cards in the near term, corresponding to the levels of around . 61700 per 10 grams and then Rs.62500 per 10 grams in domestic markets.

trigger for gold price

On factors that may affect gold prices in the near term, Nirpendra Yadav said, “In the week ahead, IMF meeting data, US CPI, FOMC meeting minutes, Retail SalesAnd consumer sentiment will influence the movement of precious metals.”

Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint. We advise investors to do due diligence with certified experts before making any investment decision.