Gold rates near 9-month high. Good opportunity to buy in current rally?

Gold rates today: Despite dollar index retreating from 3 and half month lows, gold prices continue to shine unabated for the sixth consecutive week wherein prices logged gains of around 0.80 per cent in the domestic markets. Gold future contract for February 2023 on multi commodity exchange (MCX) finished at ₹54,295 levels, logging weekly gain of ₹902 per 10 gm. However, it took a breather on the international front and ended on a muted note to close at $ 1,797 per ounce levels.

According to commodity market experts, uptrend in gold prices are likely to continue and any dip in the yellow metal rates should be seen as buying opportunity by investors. They said that gold prices may face some consolidation in next few sessions but chances of bounce back are very high and gold prices may go up to ₹55,500 per 10 gm levels on MCX whereas it has strong support in ₹53,500 to ₹53,200 zone.

Speaking on gold price outlook, Ajit Mishra, Vice President — Technical Research at Religare Broking said, "Markets will now be eyeing the US Fed meet for cues amid the anticipation of slower rate hikes. Besides, the US CPI data will also remain on the participants’ radar. We feel the commentary on the future rate trajectory and inflation trend by the US Fed would play a critical role in setting up the trend in gold."

On triggers that may dominate gold rates in near term, commodity market expert Sugandha Sachdeva said, "The lag effect of aggressive monetary tightening by the key central banks is likely to lead to a slowdown in the global economy and the looming worries are enticing the safe-haven demand for gold. Besides, China is also gradually lifting its Covid restrictions which shall boost the demand from the world’s largest gold consumer. For the week ahead, market participants would be closely watching out for the US CPI numbers for November and the Fed’s policy meeting that will guide the trajectory for gold prices. It seems almost certain that the US central bank will hike interest rates by 50 bps at its next meeting and signal an inclination to slow down its pace of rate hikes."

Expecting uptrend in gold price to continue, Religare Broking expert Ajit Mishra said, "As of now, indications are in the favor of a positive trend to continue with some intermediate consolidation. We expect to gradually inch towards the ₹54,800 to ₹54,900 zone on the domestic front. In case of a dip, the ₹53,200 to ₹53,500 zone would act as a cushion. On the international front, it could face a hurdle around $1,824 i.e. the previous swing high zone tested in August 2022 while $1,780 to $1,790 would provide the needed support."

Suggesting buy on dips strategy for gold investors, Sugandha Sachdeva said, "Considering the variables, the overall upwards bias looks to hold for the yellow metal even as there will be heightened volatility in prices due to the Fed policy meeting outcome and their stance for the coming months. The yellow metal is likely to find a cushion around ₹53,500 to ₹53,200 per 10 gm zone, while prices look poised to retest the highs of the year of around ₹55,500 per 10 gm in the coming days."

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.