Gold price today: After trading listlessly throughout the week and hovering in a narrow band, gold prices finally managed to post strong gains towards the end of the week. The gold futures contract for August expiry on the Multi Commodity Exchange (MCX) closed at 51,694 per 10 g, logging 689 gain in a single session. After trading in a range all week, the spot gold price finally reached $1865 per ounce at the close.

According to commodity market experts, the price of gold soared over the weekend as the latest reading on US inflation showed a new high in 41 years. They said that the spot gold price gave a further breakout at $1865 per ounce and is now on the verge of reaching $1900. They expected a positive trend for MCX gold price and forecast 52,200 to 52,600 short term levels. Experts added that the bullion metal has strong immediate support placed at 50,500 while key support stands at 48,800 per 10g.

Speaking on the reason for the rise in gold prices over the weekend, Sugandha Sachdeva, Vice President – Commodities and Currency Research at Religare Broking Ltd, said: “Gold prices were listless throughout the week, while hovering in a narrow band, but managed to post strong gains towards the end of the week.Investors remained on the sidelines as they watched several economic variables, whether it s whether monetary policy, inflation figures or GDP data from major economies.The dollar rose again after the recent decline, which kept gold prices below On the other hand, the ECB laid the groundwork to launch its rate hike campaign next month after nearly a decade and will also end its asset purchases next month to contain inflation. in the United States showed a new high of 41 years, with growth of 8.6% year-on-year in May, rekindling fears of runaway inflation and strengthening the case for aggressive US Fed policy tightening. Meanwhile, the RBI also hiked the repo rate by 50 basis points and the Bank of Australia announced a 50 basis point hike in the cash rate this week.”

The Religare expert went on to add that central banks around the world were following a course of monetary tightening, with soaring inflation remaining a major concern globally, but it also signaled worries about a slowdown in global growth. Energy prices remained supported amid Europe’s decision to phase out Russian supplies, as well as strong demand and physical tightening for crude and refined commodities globally , contributing to inflation concerns. So, given the various variables, even if the rate hike trajectory is negative for gold, searing inflation and fears of a downturn are likely to support safe-haven buying at gold prices in a short and medium term perspective.

Expecting an aggressive rate hike regime in the near term, Pritam Patnaik, Head of Commodities – HNI & NRI Acquisitions at Axis Securities, said: “US inflation rose again more than expected in May 2022, dashing hopes that the rising inflation trend is plateauing.The CPI rate rose 1.0% from April, pushing headline inflation to a new 40-year high of 8.6%. market were around 8.3%, with a monthly gain of just 0.7%, setting the stage for aggressive rate hikes from the US Fed going forward.”

On the gold price outlook, Anuj Gupta, VP Research at IIFL Securities, said, “The spot market price of gold gave a fresh break at $1,865 per ounce. Now the price of precious metals is expected to hit $1,900 in the near term as US inflation hit a 41-year high. positive and we recommend the buy-on-dip strategy to gold investors around the world.

Echoing the views of Anuj Gupta, Sugandha Sachdeva of Religare Broking said: “Looking at the week ahead, the trend is expected to remain positive as prices managed to break above the barrier of 51,500 per 10g level, which opened the doors to a further advance towards 52,200 to 52,600 levels of 10g. We advise you to buy on the declines in gold while keeping an eye on the short-term support of 50,500 per 10g mark, while the key holder rests at 48,800 per 10 gram mark.”

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

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