Active Stocks
Fri Sep 22 2023 15:58:38
  1. Tata Steel share price
  2. 126.7 -0.86%
  1. HDFC Bank share price
  2. 1,529.2 -1.57%
  1. State Bank Of India share price
  2. 598.1 1.67%
  1. Power Grid Corporation Of India share price
  2. 199.1 -1.34%
  1. Tata Motors share price
  2. 621.1 -0.93%
Business News/ Markets / Commodities/  Gold rates today under pressure as US dollar hits six-month high. Buy or wait for more correction?

Gold rate today: On account of US dollar climbing to six month peak, gold prices pared much of its previous week gains. The precious yellow metal price ended 91 per 10 gm lower at 58,907 levels on Friday whereas spot gold price finished around $1,918 per ounce levels. Likewise, silver price on MCX finished at 71,538 per kg levels whereas silver price in international market ended at $22.91 per ounce levels.

According to commodity market experts, gold rates today are under pressure due to upswing in the US dollar against major global currencies. US dollar index has climbed above 105 levels and it has been sustaining above this levels. They said that US dollar has gained strength due to resilience in the US economy. However, they maintained that weak Chinese economy and the downward revision of Japan's second-quarter GDP may lend support to gold prices at support levels.

Why gold rates today are under pressure?

Speaking on the reason for recent sell off in gold prices, Sugandha Sachdeva, Executive Director & Chief Strategist at Acme Investment Advisors said, "Gold prices retraced much of their last week’s gains, marking the first decline in three weeks. This can be attributed to the notable upswing in the US dollar, which competes with gold for safe-haven demand. The greenback's strength acted as a significant headwind for gold and momentarily dimmed its appeal to investors. The resilient US economy, as reflected in positive economic data, has driven the dollar index to a six-month peak, exerting pressure on gold prices. The acceleration of US services activity in August, coupled with a more-than-expected decline in jobless claims, has led to increased speculation about the possibility of another rate hike by the US central bank before the end of the year in an attempt to bring down inflation to their 2% target."

"However, concerns stemming from a weakening Chinese economy and the downward revision of Japan's second-quarter GDP have raised global economic growth worries. This backdrop will likely sustain gold's allure as a safe haven investment," Sugandha added.

US Fed FOMC meeting in focus

Expecting gold prices to remain range bound till US Fed's FOMC meeting, Anuj Gupta, Head - Commodity & Currency Research at HDFC Securities said, “Gold prices are expected to trade in $1,905 to $1,935 per ounce range till US Fed's FOMC meeting. From a technical perspective, Comex gold has strong support at $1,915 levels. Until the price holds above this level, a recovery in gold price is likely to see it move towards the $1,929 level. A fall below $1,915 will open the door towards the $1,905 level. The MCX Gold October future is expected to trade in a range of 58,700 to 59,300 per 10 gm levels. In local market, gold price trend can be diverge from international market due to Indian National Rupee (INR) volatility."

Anuj Gupta went on to add that below $1,905 next support for gold prices are placed at $1,880 and above $1,935 next resistance is placed at $1,960 levels.

Triggers that may dictate gold prices next week

On important factors that may dictate gold prices in near term, Sugandha Sachdeva of Acme Investment Advisors said, "Market attention is now firmly fixed on the upcoming release of August inflation data from the US, which will significantly influence the Federal Reserve's policy decisions at its September meeting. The outcome of this data will be closely monitored as it will impact the direction of gold prices."

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.

"Exciting news! Mint is now on WhatsApp Channels 🚀 Subscribe today by clicking the link and stay updated with the latest financial insights!" Click here!

Asit Manohar
Chief Content Producer at Live Mint Digital Team
Catch all the Commodity News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Updated: 09 Sep 2023, 01:10 PM IST
Next Story
Recommended For You

Get the best recommendations on Stocks, Mutual Funds and more based on your Risk profile!

Let’s get started
Switch to the Mint app for fast and personalized news - Get App