Gold price today dips as soaring dollar put pressure on yellow metal's demand
Gold price today: Yellow metal price is expected to trade lower as technical breakdown seems on the chart, say experts
PremiumGold price today on Multi Commodity Exchange (MCX) dipped over ₹100 per 10 gm and hit ₹50,709 levels in early morning deals. However, spot gold price held its ground at $1,742.08 per ounce at 0221 GMT. After easing on Friday, dollar index bounced back strongly and regained the psychological 107 levels in early morning session.
According to commodity market experts, this dip in yellow metal price is mainly due to the soaring dollar index that has put pressure on demand for precious bullion metal.
Reason for gold price dip
"Gold price is expected to trade lower as technical breakdown seems on the chart and investment buying on seeing from the investors. Fear of recession and strength of dollar, they choose dollar as a safe haven asset inspite of investment in gold. Spot gold price is quoting around $1740 but it may go up to $1700 to $1680 levels. So, my advice for gold investors is to sell gold around ₹50,900 levels for the near term target of ₹50,450 per 10 gm levels. However, they must maintain stop loss at ₹51,200 while taking short position in the precious metal."
Gold price outlook: Triggers that may impact yellow metal this week
On factors that may dictate gold price this week, Sugandha Sachdeva, Vice President — Commodity & Currency Research at Religare Broking said, “Markets would be looking forward to an array of factors. The first and the foremost dominating factor would be the movement of the dollar index. After last week’s dramatic rise, a continuation of this upwards momentum in the safe-haven currency would further pressurize gold prices, while a breather in the rally would turn out to be a positive trigger for gold prices. Secondly, the movement of crude oil will remain crucial as the US and its allies are contemplating a proposal to cap the price of Russian oil between $40-$60 a barrel. US Treasury Secretary Janet Yellen is traveling to the Indo-pacific region next week and will seek support for capping the price of Russian oil. Apart from this, Fed officials' speeches feature in the economic calendar for the next week. US inflation data for June will remain a key variable, while the rupee movement would also dictate the trend for gold prices in the coming days."
"While gold prices remain below $1,753 per ounce it seems a move down to $1,720 is on the cards. Although there is some support around $1,730 ... given the bearish trend overall, any upside is likely to be a retracement, at best," said Matt Simpson, senior market analyst at City Index.
Gold marked a fourth straight weekly loss on Friday, having hit its lowest since late-September a few sessions prior, hurt by the dollar's ascent and bets for steep interest rate hikes gaining traction after healthy U.S. jobs data.
"Gold has had a large move lower, and there comes a point where the market needs to pause for breath. And that's what we are seeing on gold right now," Simpson said.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
(With inputs from Reuters)
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