SYNOPSIS According to expert analysis, the current rate of gold has confidently surpassed its critical previous obstacle of $1,930 per ounce. |
Today's Gold Price:Amid the ongoing bank crisis in the US, the price of gold on MCX has soared to a lifetime high of ₹59,461 per 10 gm, outdoing the previous peak of ₹58,847 per 10 gm during the Friday session. The weekend session saw a surge in the value of the yellow metal, with a closing price of ₹59,420 per 10 gm - a significant ₹1,414 increase. The weekly gain against the previous weekend close of ₹56,130 per 10 gm stands at approximately 5.86%. In the international spot market, gold finished at $1,988.50 per ounce levels, marking a substantial 6.48% rise from the previous week's close of $1,867 per ounce.
Bullion market experts predict that the current gold rates have confidently surpassed the crucial $1,930 per ounce barrier and are poised to reach $2,000 per ounce in the international market. On MCX, gold prices have garnered support at the levels of ₹57,500 and ₹56,800, indicating that the yellow metal may soon reach levels of ₹60,000 per 10 gm. The outlook for this precious bullion metal remains optimistic, with a bullish stance on the horizon.
When asked about the reasons behind the current bullish trend in gold rates, market expert Sugandha Sachdeva explained that the turmoil caused by the US banks and the steep losses sustained by Credit Suisse shares have led to a rapid surge in gold prices. She further elaborated that investors are flocking to gold as a safe haven and a reliable store of value during these uncertain times.
Gold has emerged as a favored safe haven amidst current market turbulence, according to experts.
The yellow metal's value has been bolstered by its reputation as a reliable store of value during uncertain times, prompting investors to seek refuge in gold.
The surge in gold prices is attributed to its newfound safe haven appeal, as explained by Anuj Gupta, Vice President - Research at IIFL Securities. He noted that the escalating bank crisis in the US has caused the Dollar Index to plummet, creating a domino effect that has put assets like equities, treasury yields, and bonds under immense pressure. As a result, investors are shifting their funds from these assets and turning to gold as a secure haven in the midst of the current market turmoil.
US FED RELEVANCE
The focus has shifted to the upcoming US Fed's FOMC meeting, as highlighted by Anuj Gupta of IIFL Securities. He emphasized that the outcome of the meeting, scheduled from March 21 to 22, 2023, could have a significant impact on the gold price rally, with any further rate hike by the US Fed likely to fuel it further.
In anticipation of the Fed's decision, market expert Sugandha Sachdeva speculated that the recent collapse of prominent US banks - Silicon Valley Bank, Signature Bank, and First Republic Bank - could prompt the Fed to turn dovish and ease aggressive tightening measures, alleviating market fears of financial stress, which could have implications for the direction of gold prices.
According to Senior Commodity Research Analyst Nirpendra Yadav of Swastika Investmart, any halt in the US Federal Reserve's rate-hike cycle will boost gold prices due to increased demand for the precious metal against the dollar, and a lower opportunity cost of holding a non-yielding asset. Nevertheless, Yadav noted that the Fed is likely to maintain an accommodative monetary policy as long as inflation remains stable. Yadav advised investors to remain vigilant in light of the upcoming US Fed meeting, as the extent of the interest rate hike remains uncertain.
Prognosis for gold prices
According to Sugandha Sachdeva, the outlook for gold prices in the near term remains bullish following its successful breach of the crucial $1,930 per ounce hurdle. She predicts that the bullish momentum will likely continue in the early part of the week, albeit with volatile swings due to the anticipated outcome of the Fed's meeting. Despite this, Sachdeva believes that gold prices will test levels of around ₹60,000 per 10 gm and $2,000 per ounce in the near term. She identified key support for the precious metal at ₹57,500 per 10 gm, followed by ₹56,800 per 10 gm.
Disclaimer: Wealth Notch does not endorse the opinions or suggestions expressed above by specific analysts or brokerage firms. Before making any financial decisions, we suggest investors to consult with licenced professionals.
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