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There may be a slight improvement in gold prices in the coming week, because investors are now keeping an eye on America’s inflation report, Federal Reserve policy and China’s economic data. At present the dollar is strong and physical demand is sluggish, due to which gold remains in a limited range. However, analysts say that if interest rates are cut and the dollar weakens, gold may rise again. The possibility of increase in domestic demand during the festive season can also support gold.
New Delhi. There may be a slight improvement in gold prices in the coming week, because investors are now eyeing the economic data of America and China. Experts say that US inflation data, uncertainty on trade tariffs and statements from Federal Reserve officials will decide the direction of gold. Pranab Mer, Vice President, EBG-Commodity and Currency Research, JM Financial Services Limited, said that gold may continue to fall or move within a limited range.
Everyone’s attention will be on America’s inflation report, Supreme Court hearing on tariff dispute, speeches of Fed officials and China’s economic data. He told that there was a slight decline in the prices of gold last week, but this metal is currently trading in a limited range only. Its rise has been halted due to the strong dollar and weak physical demand, while retail buyers are currently avoiding purchases in anticipation of further decline in prices.
Gold closed down last week
On Multi Commodity Exchange (MCX), the futures price of gold for December delivery fell by Rs 165 or 0.14 percent last week and closed at Rs 1,21,067 per 10 grams. Angel One’s DVP (Research, Non-Agricultural Commodities and Currency) Prathamesh Mallya said that gold remained in the range of Rs 1,17,000 to Rs 1,22,000 per 10 grams last week. According to him, the weak report of the US labor market, demand for safe investments, expectation of interest rate cuts and purchases by central banks may affect gold prices in the coming time.
Eyes fixed on Fed policy and dollar
Analysts believe that if the interest rates in America continue to soften and the dollar weakens, then gold prices may rise again. Investors are cautious at the moment, but in the long term, gold is still considered a safe asset. Mallya said that gold is on its way to its highest annual growth since 1979 and if the current situation continues, it may soon touch new record levels.
Demand may increase during festivals
Bullion market experts say that domestic demand may increase again during the festival and wedding season, due to which the price of gold on MCX may cross Rs 1,22,000. However, the uncertainty of the international market and the strength of the dollar will keep its trend limited for now. Experts suggest that investors should not pay too much attention to short-term fluctuations and stick to a long-term investment strategy, as gold still remains the most reliable investment option.
