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Gold price dips after testing 19-month high. Will it climb to a new high?

MCX gold rate has immediate support at  ₹51,500 levels whereas it has strong support at  ₹49,000 per 10 gm levels, say bullion experts.Premium
MCX gold rate has immediate support at 51,500 levels whereas it has strong support at 49,000 per 10 gm levels, say bullion experts.

  • Gold price today: Besides the geopolitical risks, continued economic sanctions on Russia, and spiraling energy costs will have a negative effect on the global economic growth and prompt a flight to safety in gold, believe experts

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Gold price today: After inching close to its life-time high of $2075 per ounce levels, spot gold price witnessed profit-booking and the yellow metal came down below $2000 level. MCX gold rate also came down below 53,000 after ascending above 55,000 per 10 gm levels last week. According to commodity market experts, this sharp rise in precious billion metal price was mainly due to the escalating geopolitical tension caused by Russia-Ukraine war. They said that underlying tone for gold price is still positive and strong buying interest may occur at lower levels.

Expecting gold price to remain sensitive towards Russia-Ukraine news; Sugandha Sachdeva, VP-Commodity & Currency Research at Religare Broking said, "As the market mood has improved slightly, some correction and consolidation might be witnessed in gold prices after the stellar rally in recent days, where prices came in the vicinity of record highs of $2075 per ounce or 56,191 per 10 gm, but could not breach the same. We believe that gold prices will remain sensitive to the incoming news around the Russia-Ukraine conflict in the near term, but would garner buying interest at lower levels. The underlying tone is still positive for gold as inflation in the US continues to balloon, favoring interest in gold."

On upcoming US Fed meeting next week and its impact on the precious metal, Sugandha Sachdeva of Religare Broking said, "Markets are now eyeing the US Fed’s upcoming policy meeting next week, where the central bank is likely to embark on its monetary tightening path and lift rates by 25 bps."

Suggesting gold investors to remember major levels in regard spot gold price and MCX gold rate; Anuj Gupta, Vice President at IIFL Securities said, "MCX gold price has immediate support at 51,500 whereas it has strong support at 49,000 per 10 gm levels. In spot market, gold price has immediate support at $1970 per ounce levels, which the market has been holding for last few days. However, major support for spot gold is now placed at $1920 per ounce levels. As gold price is expected to remain sensitive towards Russia-Ukraine news, gold investors are advised to know their levels and maintain strict stop loss while taking any position in the yellow metal."

Advising buy on dips strategy to domestic gold investors, Anuj Gupta of IIFL Securities said, "High risk investors can buy gold in 52,000 to 52,500 range at MCX maintaining stop loss at 49,000 levels. Normal gold investors can take fresh position at around 51,500 levels maintaining stop loss at 49,000 levels. Those who want to enter at 52,000 to 52,500 levels, should maintain buy on dips strategy till the yellow metal price is above 51,000 levels on MCX."

Speaking on the triggers that may fuel gold price rally again, Sugandha Sachdeva of Religare Broking said, "Besides the geopolitical risks, continued economic sanctions on Russia, and spiraling energy costs will have a negative effect on the global economic growth and prompt a flight to safety in gold. Amid the backdrop, we advocate buying gold in a staggered manner on some declines where initial support is seen at $1925 per ounce or 51,400 per 10 gm, while key support is pegged at $1850 per ounce or 48,800 per 10 gm."

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

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