As speculation about a US Fed rate hike continues to support the US dollar, gold prices today fell below the psychological $2,000 per ounce levels in early morning deals on Friday. The price of the June 2023 gold futures contract on the Multi Commodity Exchange (MCX) decreased by more than 200 per 10 grammes but remained above psychological levels of 60,000 per 10 grammes.
Gold’s price is currently under pressure, according to analysts in the commodity markets, as the US dollar is still holding above 101 levels after recovering from its one-year low of 100.80 levels. They claimed that the US bank crisis and concerns of a US Fed rate hike are strengthening the US dollar. They claimed that the price of gold has a $1,980 immediate support level that it must not breach to avoid falling to levels of $1,945 an ounce. On the MCX, they predicted that gold will breach its present 59,700 per 10 gm support and fall to 58,500 per 10 gm levels.
US dollar in Spotlight
Anuj Gupta, Vice President of Research at IIFL Securities, commented on what is pushing down the price of gold today: “Gold prices are under pressure due to hawkish rhetoric by several US Fed members. In the near future, the price of gold may continue to lose its lustre and drop towards a range of $1,950 to $1,60 per ounce and about 58,500 levels on the MCX. However, as these two factors are largely dictating the movement of gold prices around the world, I would advise gold investors to keep an eye on the US Fed officials’ statements and Dollar Index movement.
Sugandha Sachdeva, a market specialist, stated that critical levels for the current gold rate are at the $1,980 per ounce or 59,700/10gm mark. Purchasing interest is anticipated to pick up again as long as the same is true. On the other side, when prices rise, a roadblock is anticipated to appear near the 60,750/10gm barrier. The precious metal would only experience significant advances towards the mark of 61,500/10gm with a move past the same. Concerns of another rate hike at the Fed’s May meeting increased as manufacturing activity in New York state expanded in April for the first time in five months, strengthening the dollar.
Anuj Gupta of IIFL Securities disclosed a bottom-fishing strategy for gold investments, stating, “As the US Federal Reserve is scheduled to hold a meeting the following week, the price of golden metal could experience further declines.” The price of gold may decline in the international market to levels between $1,950 and $1,950, which would be a promising supply zone for gold investors. A solid supply zone on the MCX is between 58,500 and 58,800 per 10 gm, in which case bottom fishing can be an option.