Gold price logs best weekly gain since May 2021. Should you buy, hold or sell? – Mint

Expecting further rise gold price; Sugandha Sachdeva, VP-Commodity & Currency Research at Religare Broking Ltd said, “Gold has continued to entice investors’ interest as Russia’s invasion of Ukraine has soured risk sentiments in the markets and boosted precious metal’s demand amid a flight to safety. Amid the escalating geopolitical turmoil, gold prices have climbed higher this week to clock their best weekly gain since May 2021. The aggravating tensions may continue to keep gold in demand owing to the higher risk premium. Additionally, rising commodity prices and steep surge in crude prices towards multi-year highs have further stoked inflation worries, thereby propelling gold prices on the higher trajectory as an inflation hedge.”

Rupee vs dollar

Speaking on domestic trigger that may further push gold price rally; Anuj Gupta, Vice President at IIFL Securities said, “Indian rupee has depreciated 2.48 per cent in spot market in year-to-date (YTD) time i.e. in 2022 whereas in last one week, it has slipped around 1.10 per cent against dollar in spot market. As soaring crude oil prices are expected to push India’s dollar outflow further northward, it is expected to go up to 77 levels in near term, provided there is no ceasefire in Ukraine-Russia war.”

Anuj Gupta of IIFL Securities said that Re 1 change against dollar leads to ₹250 to ₹300 change in gold price per 10 gm. So, this slide in rupee may work as an additional domestic trigger for gold price surge at MCX.

US Fed interest rate hike

Predicting high volatility on gold price ahead of US Fed meeting; Sugandha Sachdeva of Religare Broking said, “Gold prices are likely to witness some supply pressure at the mentioned levels. Fed’s reinforcement of its plan to hike interest rates at its upcoming meeting later in the month to tame soaring inflation, is likely to act as a key headwind for gold and cap recent gains. However, any convincing close above $1970 per ounce or ₹52, 500 per 10 gms would further accentuate upwards momentum in gold prices.”

MCX Gold price target

Speaking on gold price outlook in near term, Anuj Gupta of IIFL Securities said, “As I said earlier, gold prices are expected to ascend further provided there is no ceasefire in Russia-Ukraine conflict. One can buy MCX gold at around ₹51,500 to ₹51,800 per 10 gm range for near term target of ₹53,800 to ₹54,000 levels. However, one must maintain strict stop loss at ₹51,000 while taking fresh buy position.” He advised gold buyers to keep an eye on spot gold price as it has now immediate support at $1940 per ounce levels whereas it has strong support at $1880 levels. The IIFL Securities experts said that if the precious bullion metal sustain above $1970 levels, then it may surge up to $2,000 to $2,020 per ounce levels in near term. However, in case of profit-booking at current levels, he advised gold buyers to take fresh buy position at around $1940 levels.

Gold prices extended gains on Friday after the US payrolls report showed sluggish wage growth even as hiring boomed last month. The US payroll figures may offer some respite from strong inflationary pressures as the Federal Reserve gets set to raise interest rates.

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

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