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Crude Oil Price to US Dollar: Top 5 Triggers for Gold Price in Short Term

Gold Price Forecast: After ease in the dollar index and cooling global inflation, yellow metal prices rose to a 5-week high last week. The precious bullion metal ended last week in positive territory for the fourth straight week, posting a weekly gain of around 1.37 percent.

According to commodity market experts, the overall outlook for gold is positive and may rise 53,500 levels on MCX in short term. Spot gold prices are trading between $1,760 to $1,820 per ounce and may rise to $1,850 levels in the short term, he said. He said gold investors should be wary of the dollar index, commodity prices, US retail sales data expected on August 17 and a few more triggers next week.

Here we list the top 5 triggers that could dictate gold prices in the near term:

1]Crude Oil Price: “It was volatile in the previous week and any sharp movement in the same will affect inflation expectations and gold prices,” said Sugandha Sachdeva, vice-president, commodity and currency research at Religare Broking.

2]Dollar Index: “Dollar index movement will be the key variable to watch. After sliding to a low of around 104.63 mark during the week, the greenback has seen a base forming and exhibited a strong recovery towards the end of the week. If DX manages to hold above the 104.50 mark, we may witness some selling pressure in the precious metal,” Sugandha Sachdeva said.

3]US retail sales data release: The FOMC meeting on August 17, 2022 and the release of US retail sales data will be an important event for gold investors as it will provide insights into the US economy.

4]Rupee vs Dollar: “After the dollar index rose to a 20-year high of 109.30 levels, it dipped below 105 levels last week, making a base around 104.50 levels. Hence, a slight recovery is expected in the Indian National Rupee (INR) this week against the US Dollar (USD), which is positive for the yellow metal. Hence, gold investors are advised to be cautious of this domestic trigger,” said Anuj Gupta, vice-president, research, IIFL Securities.

5]Global Economic Information: There are a host of economic data releases next week, with eyes on the latest readings of the Empire State Manufacturing Index, building permits, housing starts, the Philadelphia Federal Reserve Manufacturing Index, existing home sales data and industrial production data. From the US. UK CPI, Eurozone CPI and GDP data will also be on the radar of market participants and will control gold prices next week.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies and not of Mint.

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