Optimal Gold Rate: Should You Buy or Wait as Yellow Metal Pulls Back from Record High?

Gold rate today: After the US dollar index bounced back due to the revision in the US GDP data, gold prices experienced some profit-booking during the weekend sessions. The spot gold price retreated from its all-time high of $2,531 per ounce and closed around $2,503 per ounce. On the Multi Commodity Exchange (MCX), the gold rate finished with a marginal weekly loss at ₹71,651 per 10 gm.

Experts in the commodity market attribute the decline in gold rates today to the recovery in US dollar rates following a slight revision in the US GDP data. The Personal Consumption Expenditures (PCE) price index rose by 0.2% month-over-month and 2.5% year-over-year in July, aligning with expectations, signaling moderate but lingering US inflation concerns. Currently, gold prices are facing a hurdle at ₹72,300, with a strong initial base at ₹71,200 per 10 gm. It is crucial for gold investors to monitor next week’s US job data as any improvements in the job market could alleviate inflation concerns and boost gold prices in the future.

Factors Behind the Retracement of Gold Rates

Explaining the reasons influencing gold rates today, Anuj Gupta, Head of Commodity & Currency at HDFC Securities, highlighted, “Gold price today is impacted significantly by two main factors: US dollar rates and US inflation news. Last week, a slight revision in the US GDP data led to buying interest in the US dollar, resulting in pressure on gold prices. However, following the Jackson Hole symposium, US inflation has cooled, and the market anticipates a US Fed rate cut in the upcoming meeting.”

Reflecting on the movement of gold prices last week, Sugandha Sachdeva, Founder of SS WealthStreet, noted, “Gold prices continued their positive trend from the previous week but saw a slight decline towards the end due to profit-taking from record highs. The recovery of the US dollar index from a seven-month low added further pressure on the precious metal. Domestically, gold prices faced resistance around the ₹72,300 per 10 gm mark, resulting in a minor decrease.”

Sugandha added, “A key highlight of the week was the revised US GDP data for the second quarter, leading to a rebound in the dollar. Additionally, with the PCE price index rising as expected, there are indications of persistent inflation, supporting a potential 25 bps rate cut at the Fed’s next meeting. However, the US economy’s strength and ongoing inflation have reduced the likelihood of an extensive rate cut, strengthening the dollar index.”

Key Levels to Monitor for Gold Price Today

Providing insights into the critical levels for MCX gold rates, Sugandha Sachdeva of SS WealthStreet mentioned, “In the near term, gold’s momentum seems somewhat weak unless it can surpass the key resistance level. On the downside, support is expected at ₹71,200 per 10 gm and then at ₹70,200 per 10 gm. Waiting for a price dip before adding gold to a portfolio may be wise, considering the favorable long-term outlook. The upcoming US jobs report will provide crucial insights into the health of the labor market.”

According to Anuj Gupta of HDFC Securities, “Spot gold price currently fluctuates between $2,480 to $2,530 per ounce, while the MCX gold rate ranges from ₹71,000 to ₹72,250 to ₹72,300. A closing above ₹72,300 on MCX may propel the rate to ₹73,500 per 10 gm, and for spot gold, breaching $2,530 per ounce could lead to a price of $2,560 per ounce.”

Disclaimer: The views and recommendations mentioned are those of individual analysts or broking companies and not Mint. It is advisable for investors to consult certified experts before making any investment decisions.