MCX yellow metal rate at 2 month low. Should you buy now?


The price of gold on Friday on the Multi Commodity Exchange (MCX) gained 0.01% and closed at ??47,455 in 10g levels. However, this rise in the MCX gold rate was not enough to ward off the drop in the price of the yellow metal this week. Compared to its close last Friday ??48,083 per 10g, the price of MCX gold is down today ??628 for 10g and it’s near its 2 month low. In the international market, the spot gold price closed at $ 1,795.92 an ounce, recording a weekly loss of nearly 2%.

According to commodities market experts, the price of gold has remained weak throughout this week, with the strong yield on US bonds containing any possibility of a rise in the price of gold. They said a higher bond yield helped the US dollar gain against major global currencies in the Forex market, providing an additional option for gold investors. However, they maintained that despite the weakness in the price of the yellow metal throughout this week, the spot gold price was able to hold above its support of $ 1,760 and it fell. traded in a range of $ 1,760 to $ 1,830 per ounce.

Triggers for the price of gold

Gold experts were of the opinion that the chances of an increase in the price of gold in one to two weeks seem unlikely, as the US Fed announced that the interest rate hike could come sooner than foreseen. This hawkish stance by the US central bank has worked as a trend reversal for the gold price outlook and investors are awaiting the end result of this month’s Fed meeting.

Speaking on the reason for the low price of gold today; Anuj Gupta, vice president of commodities and currency trading at IIFL Securities, said, “The reason for the low price of gold can be attributed to reasons such as the firm yield of US bonds, the appreciation of the US dollar against major world currencies in the Forex market and the hawkish trend of the US Fed. on rising interest rates. The recent rise in US bond yields has helped the US currency appreciate against major global currencies in the forex market. This gave gold investors the choice to diversify their portfolios. Apart from that, the recent announcement by the US Fed to wait for the interest rate hike earlier than expected has functioned as a trend reversal for the near-term gold price outlook. . “

Anuj Gupta of IFL Securities advised gold investors to keep an eye out for upcoming US economic data this week as it would indicate whether or not the interest rate hike will come at this month’s Fed meeting – this. He said US data leading to an increase in the number of inflation could cause the US Fed to announce a further step in reducing bonds and in which case a panic sell-off of gold may be. expected. However, any development in controlling inflation should be seen as a good opportunity for gold to rally.

Advise gold investors to keep an eye on the spot gold price; Amit Sajeja, Vice President of Commodity Research at Motilal Oswal, said: “Despite the weakness in the price of gold throughout this week, it has managed to stay above $ 1,760l. ounce, which is a good sign for the gold price outlook. Currently, the spot gold price is trading in a range of $ 1760 to $ 1835 per ounce and weakness or an uptrend can be seen if there is a break on either side of the range. “

Unveiling the investment strategy for gold investors, Anuj Gupta of IFL Securities said, “Until the US economic data comes in, we need to keep the sell strategy up. Levels of $ 1835 per ounce when we are expected to record profits at levels of around 1780-1785 per ounce. Avoid buying in a trough until the US economic date arrives, as the outlook for the price of gold appears sideways with a negative bias for this period. “

For gold investors in the domestic market; Sumeet Bagadia, Executive Director of Choice Broking, said, “The MCX gold rate enjoys strong support at ??46,500 while it has a strong resistance to ??48,500 in 10g levels. Any gold rally can only be expected when it breaks this ??48,500 hurdles while its support ??46,500 should remain intact until the arrival of another trigger on the national or international market. next target if the upper hurdle of spot gold price is overcome.

Warning: The opinions and recommendations expressed above are those of individual analysts or brokerage firms, not Mint.

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