The price of gold rose as the dollar index slipped to a 4-week low. Good Buying Opportunity?

According to commodity market Experts, soft US inflation data dragged the dollar index to 4-week low, helping gold climb to 5-week high. He said the yellow metal is likely to retain its luster and may go up 53,500 levels on MCX in the short term. Advising the ‘dip on dips’ strategy to gold investors, commodity experts said the spot price of gold is in the range of $1,760 to $1,820 an ounce and once it breaks the upper barrier, it will trade towards $1,820 an ounce. level can be reached.

Triggers that fueled the gold rush

Speaking on the reason for the rise in gold prices in the past week, Sugandha Sachdeva, Vice President – Commodity & Currency Research, Religare Broking said, “The lower than expected inflation print from the US was the major highlight of the week which suppressed the dollar of gold. The index in safety to a five-week low and in favorable flows. The US consumer price index rose 8.5 per cent in July (YoY), slightly slower than the red-hot inflation reading of 9.1 per cent in June. Also, supply- US producer prices rose 9.8 percent in July from a year ago, as compared to 10.4 percent in June and 11.3% in June amid improving chain conditions.

The Religare analyst further said that the market took an encouraging view about the report, underlining that the price pressure is likely to peak in the US mainly due to the fall in energy prices, which has led to a sharp uptrend by the US. Monetary tightening made way easier. Fed in the coming months. Markets are now expecting the Fed to hike rates by up to 50 bps, against a 75 bps increase already projected at its September meeting. However, despite the reduction in inflation numbers, overall price pressure remains very high and various Fed policymakers have indicated recently that the US central bank is not going to ease up on rates in its effort to tame inflation. , which cushioned the dollar index at 104.63. Mark and gold were seen capping the gains.

In addition, the UK economy contracted 0.1 per cent in the second quarter, slightly better than the expected 0.2 per cent decline, although it was a sharper decline from the 0.8 per cent growth seen in the previous quarter, further helping the greenback paw . The bulk of the weekly loss.

Gold Price Outlook

Expecting gold to continue to shine in the near future, Anuj Gupta, Vice President – IIFL Securities said, “The overall outlook for gold looks positive and once on dips strategy should be the main buy, till the spot market turns yellow. The metal is in the $1,760 to $1,820 range per ounce. One should buy at lower levels and book profit at higher levels. However, once the price of the precious metal stays above the $1,820 level, it moves to $1,855 $ 1,860 per ounce level.” Anuj Gupta of IIFL Securities said that gold on MCX may touch 53,500 per 10 grams soon after staying above the 52,800 level.

“As far as the price scenario is concerned, the overall trend for gold looks positive, but the prices seem to be consolidating at higher levels and have not been able to cross the crucial $1800 an ounce. 52,500 52,600 per 10 gram area in the domestic markets. A solid move above the mentioned levels would open the door for further upside in gold prices from $1835 to $1840 an ounce and 53,500 per 10 gram area in the near term. Hence looking ahead, there is some profit-booking possibility after the recent surge in gold prices, in which they may move downwards from 51,400 51,200 per 10 gram area in the coming days. Nevertheless, gold is likely to maintain its shine and the lower levels will again present bargain opportunities for higher targets in the vicinity. 53,500 per 10 grams,” said Sugandha Sachdeva of Religare Broking.

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

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