The price of gold today is close to a five-week low. Should you buy in this correction?

According to commodity market Experts, US Fed rate hike concerns and strong US economic data helped the US Dollar gain against major global currencies. He said that dollar index, after falling below 103 mark, came back to 104 level on Thursday, it should be seen from this angle. Hence, a rise in the US dollar rates puts a brake on the rally in gold prices. He advises investors to continue buying on dips as gold rates move today from 55,500 57,200 per 10 gram range.

Highlighting the reasons that put brakes on the upside in gold prices, market expert Sugandha Sachdeva said, “Prolonged tight policy concerns by the US Fed and a slew of strong economic data from the US have been the major headwinds, which kept gold higher.” 5-week low in domestic markets Retail Sales January growth of 3 percent versus 1.8 percent expected, biggest increase since March 2021, a sign of strength consumer spending, In addition, monthly US producer prices rose by the most in seven months in January, indicating a return to inflation in the US at the wholesale level.

sugandha added that weekly Useless Claims grew less than expected for the week ending February 11, reinforcing the fact that the US economy remains quite resilient despite a sharp rate increase from last year. Rise in US Dollar rates “Hawkish comments from various central bank officials indicating higher borrowing costs in the US to combat inflation pushed the dollar higher and weighed on non-interest bearing gold. The peak rate in the US now stands at 5.3 % which pushed US Treasury yields to a 2-month high, another downside trigger for prices, Sugandha said.

Nirpendra Yadav, Senior Commodity Research Analyst, Swastik Investmart said, “Investors are waiting to see how the Federal Reserve will react to the data, given that the Fed has largely adopted anti-inflation rhetoric. Interest rates are likely to continue rising for the foreseeable future.” Future, He said Fed meeting minutes and US GDP data will be important for the precious metals this week.

On gold price outlook for near term, Sugandha Sachdeva said, “The yellow metal breached key support At last week’s low of Rs 56,500 per 10 grams and the road is also looking a bit bumpy for the coming week where it is expected to hover. from 55,500 57,200 per 10 grams. Basically the movement of the dollar will define the direction of gold.” Investment Advising gold investors to ‘buy on dips’ strategy, IIFL Securities Vice President – Research Anuj Gupta said, “US dollar remains overbought and positive move in dollar index seems limited. We saw this on Friday When the index fell below 104 that triggered buying in gold. Hence, one should avoid taking short positions in gold and continue buying on dips. Immediate support held for gold prices today on MCX . 55,500 while major support is around 54,800 per 10 gram level. On the higher side, the immediate hurdle for the yellow metal is 56,800 while from 57,100 57,200 area will act as a major upper hurdle. In the international market, gold has an immediate support near $1,830, while a major support near $1,800 per ounce. On the upside, gold price is facing resistance near the $1,890 level.”

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.