Gold rate today ₹1500 away from lifetime high. Will it climb to a new peak? by StuffsEarth

According to commodity market experts, US Fed meeting minutes released last week eased the inflation pressure but the timeline for the US Fed rate cut remained elusive. So, the focus has now shifted towards fresh triggers taking place next week. These triggers include US Consumer Price Index (CPI) data and the movement in the US dollar. They advised gold investors to remain vigilant about the US CPI data. Experts further added that one can maintain a ‘buy on dips’ strategy ahead of the US CPI data release, expecting a bounce back from current support of $2,010 level in the international market and ₹62,250 per 10 gm level on MCX.

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Speaking on gold price movement in the week gone by, Sugandha Sachdeva, Founder at WealthWave Insights said, “The first week of the year saw gold prices navigating in a broad range, while the metal shed some of the recent gains to close lower by 0.97 percent. The key highlight of the week was the minutes of the last Fed meeting revealing a collective sentiment among policymakers that inflation remains effectively managed. While the central bank hinted at potential monetary policy adjustments in the upcoming months, a clear timeline for any rate cuts remained elusive.”

Sugandha Sachdeva went on to add that gold prices reacted to the robust performance of the US economy, which reported the addition of 216,000 jobs in December, significantly surpassing expectations. This robust employment figure, coupled with a 4.1 per cent annual increase in average hourly earnings (compared to the anticipated 3.9 per cent), prompted investors to recalibrate their projections for early-year rate cuts. 

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Concurrently, a resurgence in the dollar index, caused by the uncertainties surrounding the Fed’s stance on rate cuts, exerted downward pressure on gold prices. Nevertheless, geopolitical uncertainties still persist, providing support to gold at lower levels.

Important levels to watch

Asked about important levels regarding gold prices, Anuj Gupta, Head — Commodity & Currency at HDFC Securities said, “Gold prices are trading range-bound these days as US Fed meeting minutes didn’t give any clear timeline for the rate cut. As the market has already discounted the rate cut speculations, the rally in gold prices after the release of US Fed minutes remained limited, and sharp profit booking dragged the yellow metal prices below its last week’s close. However, spot gold price is still sustaining above its crucial support placed at $2,010 per ounce level while MCX gold rate is sustaining above its crucial support placed at ₹62,250 to ₹62,300 per 10 gm levels.”

Gold price outlook

Anuj Gupta of HDFC Securities said that the spot gold price is facing a hurdle at the $2,080 level while the MCX gold rate is facing a hurdle at ₹63,450 to ₹62,500 levels. He advised gold investors to buy at current levels on MCX as its current support of ₹62,250 is expected to remain sacrosanct ahead of the US CPI data release. Gupta advised gold investors to remain vigilant about the US CPI data, which will be released on Thursday next week. Any positive outcome in the US CPI data may trigger buying interest in the US dollar leading to further selling in the precious metals. However, he also maintained that in case of disappointing US CPI data, gold prices may become bullish and breach its current resistance placed at ₹63,500 per 10 gm level.

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Asked about immediate triggers in gold price outlook in the short term, Sugandha Sachdeva of WealthWave Insights also said that the focus will be on key events such as US CPI data and the trajectory of the US dollar, which has exhibited resilience around the pivotal 100-mark.”

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

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Published: 06 Jan 2024, 07:24 AM IST