Gold Rate Today: After witnessing volatility throughout the week, gold prices on the Multi Commodity Exchange (MCX) lost 2.20 per cent weekly and closed. 50,810 points on Friday. The US Fed’s tough stance on interest rate hikes amid a sharp jump in the dollar index and rising fears of global inflation was one of the main reasons for the yellow metal to slide to a 10-month low in the international market. On Friday, spot gold ended at $1,742 an ounce, having broken the previous week’s level of $1,780.
According to stock market experts, spot gold price has given a breakdown last week at the level of $1,780 an ounce. He said the fall in yellow metal prices was mainly due to sharp jump in prices. dollar indexUS Fed’s tough stance on interest rate hikes and global inflation concerns. He said the dollar index broke its resistance at 105.80 and climbed to its 20-year high of 107.78, bringing down the price of gold by $1,710 to $1,780 an ounce, he said. He further added that gold rates on MCX are currently trading from 50,400 52,000 per 10 grams level while 48,800 is the key support level for the precious metal.
Reasons for fall in gold price
Highlighting the reasons for the fall in gold prices, Sugandha Sachdeva, Vice President, Commodity & Currency Research, Religare Broking Ltd said, “Gold prices witnessed a jump and slipped to 10-month low in international markets during the week. , only to recover some lost at the end of the week. Gold prices fell sharply amid the Fed’s tight cycle amid inflation readings and a sharp move in the dollar index towards fresh 20-year highs,” he said. The U.S. preferred the safe-haven dollar to gold and breached the crucial resistance of 105.80 by moving towards 107.78 points amid non-stop chatter around rate hikes by major central banks.
The Religare expert further said that the minutes of the June meeting of the US Fed indicated that policymakers may hike rates to contain inflation, reinforcing expectations of another major rate hike in the upcoming meeting. Weekend data indicated the US economy added 372,000 jobs in June, nearly 100,000 more than expected, and the unemployment rate stood at 3.6 percent for the third straight month. This persistent labor market force will lead the Fed to aggressively raise interest rates as the labor market needs to cool to suppress demand as well as inflation, which is likely to be a major headwind for gold. .
Gold Price Outlook
Speaking on the technical outlook for gold prices, Anuj Gupta, Vice President-Research IIFL Securities said, “Last week, gold price broke the level of $1,780 an ounce in the spot market and was trading in fresh trade from $1,710 to $1,780. Slipped in the zone. Immediate support for spot gold is currently placed at $1,710 level while its strong support is placed at $1,650 per ounce level. In the domestic market, MCX Gold is trading in the range of price range. doing from 50,400 52,000 range while its placed on strong support 48,800 levels.”
Expecting the dollar index to continue to weigh on the gold price in the near future, Anuj Gupta of IIFL Securities said, “Last week, the dollar index broke its resistance at 105.80 levels and hit a two-decade high of 107.78 levels. Though there was some profit-booking in the forex market but gold price is expected to remain under pressure till the dollar index crosses above 105.80 level. Hence, gold investors are advised to wait and buy lower levels As MCX gold price has been able to stay above itself. 50,400 support level.”
Speaking on gold price outlook, Sugandha Sachdeva of Religare Broking said, “Assessing near term outlook, gold price has breached the crucial support of $1780 an ounce in the international markets, but moved towards $1720 an ounce. There is a lot of cushion getting around the Ounce. Mark, which caused some rebound in the prices. For the domestic markets, the prices have corrected but it has major support 50,400 per 10 grams has been protecting the precious metal for more than a month now. We expect this recovery to continue as bargaining is expected to drive prices up, while at higher levels, the level of 51,500 per 10 grams is likely to act as a rigid barrier and limit gains in the yellow metal.”
Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint.