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Gold rates today are near lifetime highs. Will it reach a new high?

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Gold price today: After recording an increase of nearly 14.30% in 2022, the price of the yellow metal continues to climb for the 10th consecutive week. Over the past week, the gold futures contract for February 2023 on the Multi Commodity Exchange (MCX) recorded a weekly gain of 1.38% and closed at 55,730 in 10g levels. However, in the international market, gold prices jumped around 2.36% over the past week and closed at $1,865 per ounce.

Commodity market experts say gold rates are rising on rising Covid cases in China, looming fears of a global economic slowdown after recent comments from the US Fed and the fall in the dollar rate. They said the odds of a recovery for the US dollar against major global currencies are bleak as US job growth has slowed and the Fed’s interest rate hike may not work in the wake of fears of an impending downturn. Thus, gold could become a “safe haven for investors” in the coming week and therefore any drop in gold prices should be viewed as a buying opportunity by investors.

Market experts argued that the precious metal is enjoying strong support at 54,700 levels and we should accumulate approximately 55,200 to 55,000 levels as the price of gold could hit a new high if it holds above 54,500 levels for one to two sessions next week. In the international market, they said the spot gold price has strong support at $1,820 and on the upside, $1,890 and $1,910 could be the next possible targets to look at. expect in future sessions.

Reasons for the gold price rally

Outlining the reasons for the rise in gold rates, market expert Sugandha Sachdeva said: “Notable factors supporting demand for gold as a store of value have been concerns over an unprecedented spike in cases China’s Covid outbreak, subdued dollar index trade and looming uncertainty Turning to major economic data released during the week, the minutes of the Fed’s latest meeting indicated a hawkish tone from policymakers. Meanwhile, a top Fed official said U.S. rates need to rise another 1 percent as they try to rein in price pressures.

Disappointing data on employment in the United States

However, Sugandha Sachdeva went on to add that job growth in the United States had slowed in December, raising hopes that the Fed may reassess its aggressive tightening path, which has supported a rise in gold prices. The US economy added 2,23,000 jobs in December, less than November’s job addition but better than market expectations of 2,00,000 jobs. However, wage growth slowed to 4.6% on an annual basis, against forecasts of 5%, indicating that inflation may have peaked in the United States.

Dollar rate under pressure

Nirpendra Yadav, Senior Commodity Research Analyst at Swastika Investmart, said: “The prospect of a lower interest rate hike weighed on the dollar index, causing the greenback to retreat against to 22-year highs after a bull run in 2022. Signs of slowing business activity in other major economies are also positive for the precious metal. The manufacturing PMI figures for China and the United States are below 50, raising fears of an economic slowdown. The world’s three major economies, America, China and Europe, have been declared by the International Monetary Fund (IMF) to be in trouble, due to which there is safe haven demand for precious metals.”

Gold Price Outlook, Key Triggers

Asked about the outlook for the price of gold and the main factors that could dictate the price of the yellow metal in the short term, Sugandha Sachdeva said: “In terms of the price outlook, gold has an immediate obstacle to 56,191 per 10g – its all-time high, and prices need to hold above the same level to continue their ascent. Even though the bias remains positive, prices look a bit stretched, where the precious metal is likely to find support at 54,500 per 10g brand in the next few days. Gold’s direction next week will be largely influenced by US CPI data for December and the trend of the Dollar Index.”

“If the price of gold stays above 54,500 levels over the next one to two sessions (even after the profit booking triggers), then we can expect the yellow metal prices to reach a new near-term high in the domestic markets. As the wedding season is about to start in India, we may witness a surge in the demand for gold in the domestic market which may lead to a supply and demand constraint in the Indian market of gold. So, the upcoming wedding season in India is also going to work as a positive trigger for gold prices in India,” said Anuj Gupta, VP Research at IIFL Securities.

Anuj Gupta of IIFL Securities argued that the main triggers for gold prices are coming from abroad and that in the international market, gold rates are enjoying strong immediate support placed at $1,820 as it faces an immediate hurdle at $1,890 and $1,910 an ounce.

Disclaimer: The opinions and recommendations made above are those of individual analysts or brokerage firms, and not of Mint. We advise investors to check with certified experts before taking any investment the decisions.

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