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Gold prices continued to decline for the third consecutive week as prospects of aggressive rate hikes from the US Federal Reserve put the bullion on course. According to commodity market experts, the yellow metal has been under pressure as Dollar Index has sustained at its 20-year high levels.

Dollar index, global inflation, Russia-Ukraine conflict, Covid cases in India and fiscal stimulus in China are some of the key triggers for the gold prices for the next week, as per experts.

“For the week ahead, investors would set their sights on inflation figures from the US. The inflation trajectory remains at the center stage in determining how far the rates will have to rise. Also, markets would be closing monitoring the dollar movement as that will steer gold’s path ahead. While no positive developments in the Russia-Ukraine conflict are visible, soaring energy prices would also be on the radar of investors. Markets are also expecting some fiscal stimulus measures to be rolled out by China in their effort to boost the economy which shall improve sentiments in the markets," said Sugandha Sachdeva, VP — Commodity & Currency Research at Religare Broking Ltd.

While gold is perceived as an inflation hedge, higher US interest rates lift the opportunity cost of holding zero-yield bullion. Gold is considered a safe store of value during global uncertainties, such as the Ukraine war.

“Gold will continue to be a preferred asset class until uncertainties over the Russia-Ukraine conflict continues and will continue to attract investments as a proven hedge against other asset classes. Gold prices will continue to find support from the geopolitical risk and the inflation pressure in the global environment. We continue our Neutral stance on Gold and recommend a ‘Buy-on-Dips’ strategy," said Axis Securities.

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

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