Spot Gold Price Dips After Breakout. Good Opportunity To Buy, Say Experts
Gold price today: After giving breakout at $1865 per ounce levels, spot gold price went through some profit-booking on the weekend trade session and ended at $1851 per ounce levels. At multi commodity exchange (MCX), gold rate ended at ₹50,984 per 10 gm mark. According to commodity market experts, yellow metal price on MCX is facing minor resistance at around ₹51,500 per 10 gm levels and once it sustains above this level, the precious metal price may go up to ₹52,300 to ₹52,800 per 10 gm levels in short term. They went on to add that ₹50,500 to ₹48,700 would be a good buying zone for gold investors.
Experts went on to add that spot gold price has immediate support placed at $1830 per ounce levels whereas strong support lies at $1780 per ounce levels. So, they were of the opinion that buying interest may emerge at around ₹50,500 levels on MCX.
Speaking on gold price outlook, Anuj Gupta, Vice President — Research at IIFL Securities said, “Spot gold price gave breakout above $1865 per ounce levels on Thursday and then it fell down below $1850 per ounce levels on Friday. So, one can expect some more decline in gold price up to $1830 levels or at ₹50,500 per 10 gm levels on MCX. Those who want to take fresh position they can start accumulating from these levels as overall sentiment for gold is still bullish.”
Sugandha Sachdeva, Vice President — Commodity & Currency Research at Religare Broking Ltd said, “The yellow metal remained under pressure at the beginning of the week, where prices fell to a two-week low as US treasury yields advanced on speculation of further rate hikes to tame inflation. Meanwhile, the US dollar index regained some composure following a sharp decline in the prior two consecutive weeks. However, mounting inflation concerns amid rising energy prices and recession fears helped prices rebound from their lowest levels in two weeks. Crude prices firmed further as China eased some Covid-19 restrictions and European Union reached an agreement to ban Russian seaborne crude oil imports and refined products for another six to eight months, raising concerns about inflation rising further.”
Expecting gold demand to remain on the higher side, Sugandha Sachdeva of Religare Broking said, “Besides, gold continues to remain in demand for its safe-haven status as there is no end in sight to the war in Ukraine. The global economy is showing signs of a slowdown owing to the war and the Western sanctions imposed in response to it, which will continue to draw investors towards the precious metal.”
On suggestion to gold investors, Anuj Gupta of IIFL Securities said, “One should start accumulating gold from ₹50,500 levels and keep on accumulating till it is above ₹48,700 per 10 gm levels. There can be sharp rebound in precious metal price from these levels and once it sustains above ₹51,500, it may go up to ₹52,300 to ₹52,800 per 10 gm levels on MCX.” He said that if the precious metal touches ₹48,700 to ₹50,500 range, then it would be a good opportunity for fresh investors to chip in and take fresh position.
On gold price cues, the Religare expert said, “We have mixed cues for gold, where prices are seen facing resistance at $1865-1870 per ounce or ₹51,500 per 10 gm area, which could keep the precious metal under pressure in the near term. A strong US jobs report for May towards the end of the week is indicative of strength in the US labor market and is expected to keep the US Fed on an aggressive policy tightening track while weighing on gold prices. On the contrary, prices are likely to find a floor around ₹50,500 per 10 gm and then ₹48,800 per 10 gm mark, which could prompt renewed buying interest in gold, as the precious metal will continue to benefit from the worrisome inflation narrative.”
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.