Gold price rises two weeks in a row amid US rate-pause speculation

The price of gold continued to rise for the second consecutive week as the US dollar weakened amid speculation of a rate pause from the US Federal Reserve in the upcoming Federal Open Market Committee (FOMC) meeting. Gold futures for August 2023 on the Multi Commodity Exchange (MCX) finished at Rs 59,840 per 10 gm, while the international market saw gold prices ending at $1,960 per ounce.

Commodity market experts believe that gold and silver prices are expected to remain sideways to positive due to the retracement of the US dollar from its ten-week high levels. The market speculates that the surge in US jobless claims, reaching the highest levels in the past 18 months, may pressure the US central bank to halt its interest rate hike cycle. Experts advise gold investors to adopt a "buy on dips" strategy, considering gold's current sideways to positive movement and view any price dips as buying opportunities.

Sugandha Sachdeva, Executive Director & Chief Strategist at Acme Investment Advisors, attributed the recent surge in gold prices to the weakening of the dollar index and the expectation that the US Federal Reserve may slow down its tightening spree. The increase in US jobless claims has raised concerns about the labor market's fragility, potentially leading the central bank to end the interest rate hike cycle.

Nirpendra Yadav, Senior Commodity Research Analyst at Swastika Investmart, added that gold and silver prices registered gains due to weak cues from major economies in the previous week.

Regarding the outlook for gold prices in the near term, Prithviraj Kothari, National President at India Bullion and Jewellers Association (IBJA), pointed out that the US ISM PMI data has consistently remained below 50, indicating a slowing economy. This factor should support the price of gold. Kothari also mentioned that the disappointing economic data is providing new momentum to the gold market, with the next resistance levels at $2,000 and $2,025 per ounce.

Sugandha Sachdeva emphasized that gold prices are currently moving within a tight range of ₹59,200/10gm to ₹60,400/10gm, and until these levels are breached, a decisive move seems unlikely. In the international markets, gold prices have been confined between $1,935 and $1,985 per ounce. The outcome of the FOMC meeting and the policy outlook for the coming year will be crucial factors to watch. A breach on either side of the range will determine the next direction for the precious metal. A convincing breach below ₹59,200/10gm would indicate further weakness for gold, while a move above ₹60,400/10gm would accelerate its upward momentum

Disclaimer: Please note that the views and recommendations expressed in this article belong to individual analysts and do not reflect the opinions of Bizz Buzz News. We strongly advise investors to consult certified experts before making any investment decisions.