Investing in gold? Experts weigh in on buying or waiting amid Fed rate hike rumors
Gold Rate Update News: The gold rate today has retraced from its lifetime high of ₹61,371 per 10 gm on MCX due to the buzz surrounding a potential interest rate hike by the US Federal Reserve. Gold future contract for June 2023 on MCX closed at ₹59,945 levels on Friday, while in the international market, the precious yellow metal ended at $1,989 per ounce levels. Despite this retracement, the rally in the precious metal continued for the second consecutive month, with prices gaining around 0.50 per cent.
Commodity market experts suggest that gold price today has support at $1,975 and $1,950 levels and is facing hurdles at $2,010 and $2,030 levels in the international market. On MCX, gold
price today has support at ₹59,500 and ₹58,700 per 10 gm levels, and is facing resistance at ₹60,500 and ₹61,200 per 10 gm levels. The US Federal Reserve is facing pressure to increase interest rates due to higher than anticipated inflation and labor data. This has resulted in a lot of speculation in the market that the Fed might announce a 25 basis point rate hike during the upcoming FOMC meeting.
The US dollar rate will continue to dictate gold prices, and investors are advised to maintain a "buy on dips" strategy as the $1,960 to $1,950 supply zone is looking good for fresh long positions. The ongoing insurgency in Sudan, coupled with high-interest rates, high inflation, a
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contracting GDP, and weak manufacturing PMIs, have raised concerns of an economic slowdown. Despite this, the losses in the precious metal were limited as investors remained cautious and vigilant in the face of these challenges in the global economy.
Anuj Gupta, Vice President - Research at IIFL Securities, believes that the overall bias for gold is still bullish, and gold investors are advised to maintain a buy on dips strategy during the current correction. Gold rate today has immediate support placed at $1,975, whereas major support for the yellow metal is placed at 1,950 per ounce levels. Gupta believes that the US dollar would continue to dictate gold price movement, and the Dollar Index is not going to
sustain long above 100 levels.
Gupta anticipates that gold prices will soon reach the levels of $2,010 and $2,030 in the international spot market once the price emerges from the base-building mode. On MCX, ₹60,500 and ₹61,200 should be the target for those who are looking to indulge in bottom fishing. Amit Sajeja, Vice President - Research at Motilal Oswal, believes that the gold price has a good supply zone of $1,960 to $1,950, and one can do bottom fishing in this zone, maintaining a stop loss around $1,930 per ounce levels.
Note That the views and recommendations made by individual analysts or broking companies are their own, and investors should check with certified experts before taking any investment decisions.