Gold price today: Due to interest rate hikes by central banks around the world, the price of gold fell to its lowest level in 16 months. However, the spot gold price rebounded from its support price of $1680 per ounce and closed at $1726.40 per ounce on Friday, registering an intraday gain of almost 0.50%. The price of gold on the Multi Commodity Exchange (MCX) soars 305 by 10g on Friday and finished at 50,680 levels.

According to commodity market experts, the spot price of gold is trading in the range of $1680 to $1750 per ounce, while MCX gold rates are trading in the range of 49,500 to 51,500 per 10g. They said that $1680 has worked as strong support for the international price of gold over the past couple of years and until the price of the yellow metal holds above these levels, hold the line. buying strategy in the event of a dip. They added that a downtrend can only be expected when this key support is breached.

Speaking on the reasons behind the bumpy gold price trading pattern, Sugandha Sachdeva, Vice President – Commodities and Currency Research at Religare Broking Ltd, said: “Gold prices have fell to a 16-month low during the week, amid rapid interest rate hikes by key central banks in their fight against widespread inflationary pressures, which removed the metal’s attractiveness for investments .However, prices managed to rally impressively from key support at $1,680 an ounce amid renewed concerns about the global growth outlook and widespread inflationary pressures.

The dollar index softens

Sugandha Sachdeva went on to add that the easing in the dollar index has prompted buying interest in gold at lower levels. On the data front, initial jobless claims in the United States jumped for the third consecutive week while the Philadelphia Fed’s manufacturing index contracted for the second consecutive month, fueling concerns over economic growth. . sectors.

The Religare analyst said the highlight of the week was the ECB’s monetary policy meeting, during which the European Central Bank raised interest rates by 50 basis points, beating market expectations to combat high inflation. The ECB President even warned of lingering inflationary risks as the war in Ukraine drags on and energy prices hold. On the other hand, the Bank of Japan, as expected, maintained a dovish stance, while raising inflation expectations and highlighting risks to the economic outlook. However, with markets closely watching the Fed’s policy meeting next week, bets on a 100 basis point rate hike by the US Fed have eased, leading to losses for the greenback for the first time in four weeks, while supporting gold prices. In addition, the energy crisis eased in Europe as Russia resumed gas flows to the region through a key pipeline, boosting market sentiment.

Pivot levels for gold prices

Asked about the important levels regarding gold prices, Anuj Gupta, VP – Research at IIFL Securities, said: “Spot gold price is enjoying strong support from $1680 to $1675 l ounce as the immediate hurdle for the yellow metal in the spot market is placed around $1750 at the 1760 levels. A bullish or bearish trend for the precious metal can be assumed at the breakout on either side of the range. MCX, the price of gold is currently trading within the range of 49,500 to 51,500. Any dip in the price of gold should be seen as a buying opportunity until these pivotal lows are intact.”

The IIFL Securities expert said taking a broad stance should be avoided as gold prices are expected to remain highly volatile ahead of the US Fed meeting scheduled for next week. He said the market is expecting another rate hike announcement at this meeting.

Short Term Gold Price Outlook

Speaking on the gold price outlook, Sugandha Sachdeva of Religare Broking said: “The road ahead for gold is slightly bumpy, but despite the strong selling seen over the past five consecutive weeks, prices still managed to find a strong cushion at the key $1680/oz level, which has protected gold for almost two years. gold is recovering, where initial support can be seen at 49,500 per 10g mark on MCX, while key support rests at 48,800 per 10g. Only if prices penetrate this pivotal support convincingly will we likely see an acceleration in bearish momentum. That said, we expect gold prices to generate buying interest at lower levels and see a pullback towards 51,200 to 51,600 per 10g area in the next few days.”

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

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