Gold price: On Friday, on the Multi Commodity Exchange (MCX), the gold April future contract was at the level of Rs 51,275 per 10 grams. On the other hand, spot gold bounced back from the recent high of $2,070 and settled at $1,924 an ounce.
Commodity market experts, claiming to reduce military operations around Kyiv, Russia, saw sentiments weaken last week. However, there remains considerable doubt about the reduction in conflict. In addition, the dollar index has started strengthening, while the US Fed has already indicated a rate hike in the next meeting. According to Livemint, the following 5 factors may affect the metal prices going forward.
Amit Sajeja, Vice-President (Research), Motilal Oswal, said, “Recently, the dollar index has seen a firming trend, which has supported the yellow metal in the spot market. If there is a rise in the dollar index further, then the brakes will remain on the good rise in gold prices.
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Russia-Ukraine news : Religare Broking Ltd. Sugandha Sachdeva, VP (Commodity and Currency Research), Key, said, “Safe haven demand for gold has eased last week amid progress in Russia-Ukraine peace talks. Sentiment weakened by Russia’s promise to reduce military action around Kyiv. However, there is still a lot of doubt, hence gold remains supported at the psychological level of $1,900 an ounce.”
US Fed interest rate hike: Anuj Gupta, Vice President, IIFL Securities said, there is a tendency to prepare the market for the results of the US Fed before its proposed meeting. Its recent statement of 50 bps hike in interest rates should be seen in this context. This should keep an eye on the US Fed meeting and its official statements.
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US data: Data related to bond yields in the US was positive recently, but inflation is expected to remain a major concern. US inflation data will remain important going forward and investors in gold are advised to keep an eye on the latest data related to it.
Rupee vs dollar: Anuj Gupta of IIFL Securities said, along with these global factors, a domestic factor also needs to be monitored. Crude oil weakened after Russia-Ukraine tension eased, which strengthened the Indian rupee against the US dollar. However, if there are no positive developments in Russia-Ukraine peace talks, crude will again strengthen. In such a scenario, the dollar will strengthen as India is dependent on imports for 85 per cent of its oil requirement.
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