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Gold prices rose to a one-month high. Should you buy now?

Today’s Gold Price: Gold prices rose to a one-month high last week amid concerns over a slowdown in global economic activity and rising US-China tensions. Gold prices on the Multi Commodity Exchange (MCX) ended the October futures contract 51,864 per 10 grams while spot gold ended at $1,774 per ounce after testing the $1,800 level last week.

According to commodity market experts, the overall outlook for gold prices is positive but profit-booking is widely awaited following a rebound in the dollar index and the spot gold price is expected to go from $1,750 to $1,720 per ounce level. Therefore, one should wait for a profit-booking trigger and enter around 51,300 onwards 51,500 levels in the domestic market while $1,750 in spot is a good buy level for gold investors.

Commenting on the reason for the rise in gold prices in the recent sessions, Sugandha Sachdeva, Vice President, Commodity and Currency Research, Religare Broking, said, “Gold prices rose to a one-month high during the week, hitting the key $1800 per ounce mark. Factory activity data released by various economies raised deep concerns about a slowdown in global economic activity. Another key variable behind the rise in prices was the dollar index, which fell to near the 105 mark before witnessing a significant rebound in the week and printing gains. In addition, tensions between China and Taiwan rose amid US House Speaker Nancy Pelosi’s visit to Taiwan, which dislikes China and has seen interest in gold as a safe haven. .”

Religare experts said hawkish comments from key Fed officials had boosted bets for a sharp rate hike this year, prompting buying interest in the dollar at lower levels. Another major highlight of the week was the Bank of England’s interest rate decision, in which it raised key rates by 50bps to 1.75 percent, the highest since December 2008 in its fight against scorching inflation. The central bank gave a dovish signal to the UK economy amid high energy prices and pointed to higher price pressures in the last quarter of the current year and most of 2023. Safety of gold.

Gold price outlook

On the outlook for gold prices in the near term, Anuj Gupta, vice-president, research, IIFL Securities, said, “The overall outlook for gold is positive but the dollar index points to a rebound from 105 levels. So, we can see. If the US dollar continues its gains after the strong US jobs report released on Friday, it could range from $1,745 to $1,750.” levels but it could rise to $1,700 levels. Short-term investors can buy gold around 51,300 onwards 51,500 per 10 g level for targeting 52,600 to the 10 gram mark but short-term traders are advised to buy around $1,750 in the spot market. However, long-term investors are advised to start buying 51,500 levels and will continue to rally above every 4-5 percent decline, but may rally further if gold prices fall to $1,725 ​​per ounce from the $1,720 per ounce level in the spot market.

“The key US jobs report at the end of the week pointed to a strong labor market for the US and established that the economy is not yet in recession. The US economy added 528,000 jobs in July, double the expected 250,000 jobs. This suggests that the US Fed will continue to raise rates in the near term. This strong payrolls report boosted the dollar index. increased and eroded some of gold’s recent gains,” said Sugandha Sachdeva of Religare Broking.

On his advice to gold investors, Sugandha Sachdeva of Religare Broking said, “Looking ahead, the overall bias is to the upside, but we are likely to see a cooling in prices. 52,500 per 10 grams and the psychological $1800 per ounce mark are acting as stiff resistance levels and restricting the rally in prices. We expect profit booking after the recent reversal, where gold finds support 51,100 per 10 grams ($1750 per ounce) initially and later 50,500 for 10 grams ($1720 per ounce). A dip towards the mentioned support areas can be seen as an opportunity to accumulate the precious metal, from where it can be pushed higher and shifted farther away. 53,500 for 10 gm level.”

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

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