Gold Price Rebounds on Speculations of US Fed Rate Cut/PTI
Gold Price Rebounds on Speculations of US Fed Rate Cut
After reaching a five-week low of around ₹61,400 per 10 grams last week, gold prices on the Multi Commodity Exchange (MCX) experienced a robust rebound, gaining approximately ₹600 per 10 grams. Key factors contributing to this rebound include profit-booking in US treasury yields and strong US economic data, fueling speculations about a potential rate cut by the US Federal Reserve.
Reasons Behind Gold’s Recovery
Anuj Gupta, Head of Commodity & Currency at HDFC Securities, highlighted that the rebound in MCX gold rates was triggered by speculation regarding a rate cut by the US Federal Reserve following robust US economic data. Additionally, profit-booking in the US bond market played a role in boosting gold prices across various exchanges.
Potential Influences on Gold Prices
Sugandha Sachdeva, Founder of WealthWave Insights, identified geopolitical tensions in the Middle East as a potential supportive factor for gold prices. She also mentioned that upcoming events, such as the release of the US PCE price index, US Q4 GDP advance estimates, and decisions on interest rates by the Bank of Japan and the European Central Bank, could influence gold price movements in the short term.
Gold Price Outlook
Sachdeva provided insights into the short-term outlook for gold prices, indicating that resistance is expected around ₹62,700 per 10 grams, while a crucial support level exists at ₹61,500 per 10 grams. Considering the current strength of the US dollar index, there is a downside bias. A breach of the key support at ₹61,500 per 10 grams could potentially lead to lower levels of around ₹60,700 per 10 grams in the coming days.
Internationally, gold prices are facing resistance around $2,065 per ounce and may test lower levels of around $1,965 per ounce. Despite potential corrective phases, the long-term outlook suggests that declines in gold could present attractive buying opportunities. The overall trend remains positive for the year ahead, emphasizing the enduring value and potential resilience of gold as an investment option.