MCX gold price is expected to find strong support at ₹48,800 whereas ₹51,500 levels would restrict upside in the yellow metal, say experts.

Gold price today: Dollar index climbing to 19-year on Thursday, pull down yellow metal price around $1700 levels

Gold price continued to remain under pressure for fifth successive week as dollar index climbed to 19-year high of 109.30 on Thursday. On Multi commodity Exchange (MCX), gold price August contract ended ₹125 lower at ₹50,103 per 10 gm levels onFriday whereas spot gold price lost 0.21 per cent  and closed at 1706 per ounce levels.

According to commodity market experts, gold price is expected to remain under pressure as speculations are high about US Fed increasing the interest rate by 75 bps after the US inflation hitting 41-year high. They said that spot gold price HASimmediate support placed at $1675-80 per ounce levels and can go up to $1620 per ounce levels in near term. On MCX, gold price is expected to find strong support at ₹48,800 whereas ₹51,500 levels would restrict upside in the yellow metal....!!!!!!

Speaking on the key headwinds for gold price, Sugandha Sachdeva, Vice President — Commodity & Currency Research at Religare Broking said, "It was the fifth consecutive week of decline for gold prices,wherein the precious metal slipped towards one-year lows in the international markets,though steep depreciation in the Indian rupee still cushioned the domestic gold prices to a certain extent. The key headwind for gold has been the persistent strength seen in the dollar index which jumped towards fresh two-decade highs.US annual consumer prices surged by 9.1 per cent in June as against expectations for an 8.8% rise, the highest in nearly fourdecades which indicates that inflationary pressures are quite rampant across the US economy. This has raised the bets of another large interest rate hike at the Fed’s forthcoming meeting, which is providing an upward thrust to the dollar index. Markets are now even pricing in the possibility of a 100 bps rate hike as against the previous expectations of a 75bps increase as the Fed might move up a gear with its focus on battling runaway price pressures. This has dented the investment appeal of precious metal."

Dollar index tapering gold prices:

On how strong dollar index is tapering gold prices, Sugandha Sachdeva of Religare Broking said, "Higher interest rates tend to increase the opportunity of non-yielding gold and investors are seen moving away from gold to seek refuge in the dollar. Prices have been hit hard majorlybecause of higher interest rate projections, despite a risk-averse environment and the chatter around the growing recessionaryrisks. However, excessive rate hikes are likely to deteriorate the growth outlook and shall ignite the safe haven appeal of gold from a medium to long-term perspective, while lower levels will make it all the more attractive."

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