Gold price today jumps as dollar index slips to one week low. Should you buy?
1 min read 09 Sep 2022, 12:01 PM ISTGold price today on MCX shot up ₹139 per 10 gm and hit ₹50,495 levels in early morning deals
PremiumGold price today went up following ease in US dollar rates. On Multi Commodity Exchange (MCX), gold price shot up by around ₹139 per 10 gm to ₹50,495 levels whereas spot gold price was quoting around $1720 per ounce at 11:40 AM. The dollar index today corrected to the tune of 0.66 per cent in early morning deals to 108.972 levels, hitting one week low on Friday session.
Speaking on gold price outlook, Amit Sajeja, Vice President — Research at Motilal Oswal said, "Gold prices have risen because US dollar rate today has softened. Dollar index has slipped from record high of 110.80 to 108.86 levels that is helping the precious metal to go upside. Spot gold price is expected to trade in $1680 to $1755 per ounce range in short term whereas MCS gold price may trade in between ₹49,800 to ₹51,200 per 10 gm range. However, overall trend is sideways to positive and investors are advised to maintain buy on dips strategy and avoid taking short positions."
On reason for dip in US dollar rate today, Amit Sajeja of Motilal Oswal said that ECB raised interest rate by an unexpected 75 basis points that has triggered profit-booking in US dollar.
"At present levels, gold price appears in the short term to have bottomed out," said Michael Langford, director at corporate advisory firm AirGuide adding, ""Ongoing jobless claims and employment numbers will materially influence the central bank's views of the strength of the underlying economy."
Data on Thursday showed claims for unemployment benefits fell last week in the United States, highlighting the robustness of the labor market and bolstered expectations of Fed's aggressive rate hikes. The Fed is "strongly committed" to fighting inflation and remains hopeful that can be done without the "very high social costs" involved in prior campaigns to control surging prices, Fed Chair Jerome Powell said.
"Gold has been essentially oscillating between about $1,685-$1,680 and $1,725-$1,720 digestive range," said DailyFX currency strategist Ilya Spivak. Higher interest rates increase the opportunity cost of holding the non-yielding bullion and boosts the dollar.
(With inputs from Reuters)
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
