On Monday, The Gold prices in international markets dropped to a fresh 2.5 year low as a result of the strong dollar. And the likelihood that the US Federal Reserve will continue raising interest rates in an effort to reduce inflation. Spot gold was down 1.15% at $1,609.4 per ounce after earlier in the day reaching its lowest level since April 2020.
Vinay Rajani, Senior Research Analyst, HDFC Securities says “LME gold spot is in continuation of a down trend. Resistance for the same is seen at $1680 while support is seen around $1600. For MCX gold October future, positional supportS are seen at Rs 48500 and Rs 47300.”
Downward Trend in Gold Spot Price
At 13:00 (+5:30 GMT), Gold contracts were down 0.65 percent to Rs 48,997 for 10 gram on the Multi-Commodity Exchange (MCX). While silver was down 1.56 percent to Rs 54,514 for a kilogram. Strong dollar bullish momentum and the likelihood of additional interest rate increases by the US Federal Reserve to control inflation caused gold prices to drop to a new 2.5-year low. The downward trend in LME gold spot is still there. Support for the same is around $1600, while resistance is at $1680. Positional supports are observe at Rs 48500 and Rs 47300 for the MCX gold October future.
According to Pritam Patnaik, Head of Commodities, HNI and NRI Acquisitions at Axis Securities. The US Federal Reserve’s overtly hawkish outlook and a surging dollar index. Which is currently at a new high of 113.567. The main reasons why gold prices have breached and are still trading below the psychological level of $1650.
The fact that central banks throughout the world are willing to forgo growth. In order to control inflation has undoubtedly opened the way for a higher interest rate environment, which is bad news for gold prices that don’t pay interest. Fears of a recession have boosted the dollar’s appeal as a safe haven and driven it higher. For gold, the suffering will persist in the near future.