Gold prices continue to remain stable within a range for quite some time now, with rates now falling below ₹60,000 per 10 grams. Pressure on yellow metal was created due to strong demand for the yellow metal in the previous month. However, now, due to the strengthening of the US dollar, there has been a decline of more than ₹2,500 per 10 grams in gold prices.
The Dependence on the US Fed
According to Prithviraj Kothari, the Managing Director of RiddiSiddhi Bullions (RSBL), gold prices were almost at ₹60,000 before the US Fed’s meeting on June 13. Various speculations are being made about whether the Fed will stop the interest rate hike after 10 consecutive hikes or continue its aggressive approach.
Gold Base Price
After seeing significant growth in the first quarter of this calendar year, there has been some profit-booking in gold prices due to the strengthening of the dollar and treasury yields. It is believed that gold is now forming a base of around ₹60,000 for the next bull run, according to Rahul Khilnani, VP-Commodities at Mehta Equities.
Furthermore, according to market analysts, there is weak demand for gold due to the traditional slump in gold prices during the summer season. There is no significant reason in the near future to boost the demand for the yellow metal. Apart from this, buying in precious metals has become easier due to the safe purchase of valuable metals in global equity markets.
Gold Prices May Rise Again
Rahul Khilnani said that the results of the US Fed’s upcoming meeting could affect gold prices. The picture of gold prices will be clear only after the meeting. He said that the dollar index is unable to maintain its level at 104.50, which is a big trigger for the movement of gold. US monetary policy and US unemployment figures can take the direction of interest rate freeze by the Fed. Due to this, there could be a rise in gold prices.
How Much Can Prices Fall?
Rahul Khilnani said that RBI’s intervention to support the Indian currency in the domestic market could harm gold prices. However, we will keep our bullish view on gold until it breaks below the level of ₹58,600. Conversely, it could touch around ₹61,440. Above this, the next level could be ₹62,500 and ₹63,650 per 10 grams.
Mr. Kothari said that the expectation of interest rates is making it difficult for gold to rise. This is because it is supporting the US dollar, which is doing business at a three-month high. He said that if gold breaks its near-term support, it could fall to ₹59,200-58,400.
According to IBJA rates, on Friday, gold prices closed at ₹59,960 per 10 grams. This price is without adding taxes.
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