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Gold price ended in negative zone for fifth successive week losing 1.32 per cent in the week gone by. As dollar index climbed to 20-year high last week, spot gold price nosedived to its one year lows. In international spot market, precious bullion metal corrected by 2.02 per cent and closed at $1706 per ounce levels after making an intraday low of $1697 per ounce on Friday session.

Silver price in international spot market also corrected by 3.12 per cent in the week gone by and closed at $18.69 levels. MCX Silver corrected sharply by 2.70 per cent and closed at 55,587 levels.

"Expectation of US Fed increasing the interest rates in upcoming meeting put pressure on bullions. Fear of recession also faded the demand of gold and silver prices as a safe haven. Demand for both physical and electronic gold has gone down and the trend is expected to continue for few more sessions till dollar index doesn't give some sharp correction from its near 20-year high of 109.30 levels."

Here we list top 5 factors that may dictate gold price in near term:

1] Dollar index: "The foremost factor that may dictate gold prices in near term will be the dollar index movement where it has been on a splendid one-way move on the upwards incline. Any cool-off in the dollar index would lead to some respite in gold prices while on the contrary, a further sustainable rise above the 109.50 mark would mean more pressure on gold prices," said Sugandha Sachdeva, Vice President — Commodity & Currency Research at Religare Broking Ltd.

2] ECB meeting: "Markets will focus on the ECB policy decision which is the key event lined up for the week ahead, where the ECB is expected to hike rates for the first time since 2011, given the concerns about inflation overshooting expectations. However, the Euro Zone has been facing an acute energy crisis which has led to a downward revision in its growth outlook. So, how the ECB strikes a balance remains to be seen," said Sugandha Sachdeva.

3] Rupee vs dollar: The Indian rupee movement would be on market participants’ radar as the Indian National Rupee (INR) hit its new nadir in the week gone by.

4] US manufacturing and service PMI data: This trigger is expected to keep the volatility in gold price intact. Though it will have direct impact on base metals, it is going to impact dollar index, which is prime trigger for the yellow metal these days.

"The Us manufacturing and service PMI data will mainly impact base metals but any positive announcement is expected to boost dollar index, which is major dictator for gold price movement these days. So, gold investors and traders are advised to keep an eye on it," said Anuj Gupta, Vice President — Research at IIFL Securities.

5] China crisis: Evergrande crisis in China has taken a big tall on the real estate sector of the dragon nation. Now, after the rising Covid cases in China and sluggish demand is going to impact gold prices as well.

"China is biggest importer of crude oil and gold.. Ease in demand is going to adversely impact the yellow metal," said Anuj Gupta of IIFL Securities.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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