After experiencing some turbulence throughout the previous week, the price of gold on the Multi Commodity Exchange (MCX) recorded a 2.20 percent weekly loss and concluded at the 50,810 level on Friday. The US Fed’s aggressive approach to interest rate hikes amid growing concerns about global inflation and the sharp surge in the dollar index were two of the main factors that caused the yellow metal to decline to its lowest level in the international market in 10 months. The spot gold price on Friday was $1,742 per ounce, after a breakdown the previous week at $1,780 levels.
Stock market specialists claim that the current gold price has declined from last week’s levels of $1,780 per ounce. They claimed that the strong increase in the dollar index, the US Fed’s hawkish stance on interest rate hikes, and fears about global inflation were the key causes of the decline in the price of the yellow metal. They claimed that the dollar index broke through its 105.80-level resistance and continued to rise to its 20-year high of 107.78 levels, which caused the spot gold price to decline to levels between $1,710 and $1,780 for an ounce. They went on to say that MCX gold rates are currently trading between 50,400 and 52,000 per 10 gm, with 48,800 serving as the key support level for the precious metal.
Reason for a dip in the gold price
Sugandha Sachdeva, Vice President — Commodity & Currency Research at Religare Broking Ltd, highlighted the causes for gold price aversion, saying, “Gold prices had a rocky ride this week, falling to a 10-month low in foreign markets, only to regain some lost ground by the end of the week. The Fed’s tightening cycle amid high inflation readings and the sudden surge in the dollar index towards new 20-year highs caused gold prices to drop precipitously.” She stated that investors chose the safe-haven dollar over gold, and it broke through the significant resistance level of 105.80 to march upward towards the 107.78 mark despite the non-stop discussion about key central banks raising interest rates.
Sugandha Sachdeva of Religare Broking commented on the forecast for the price of gold “When considering the near-term perspective, gold prices have broken through the critical support level of $1780 per ounce on the international markets, but are now seen finding a lot of cushion around the $1720 per ounce mark, which has caused some of the prices to bounce. In the local market, prices have fallen, but the critical support level of 50,400 per 10 gm has been protecting the precious metal for more than a month. We anticipate that this rebound will last as bargain hunting is anticipated to drive up prices. On the higher side, however, the level of 51,500 per 10 gm is likely to function as a stiff barrier and limit advances in the yellow metal.”
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