Gold falls below Rs 1 lakh, trades near two-week low. Analysts predict further downside
Gold October futures prices at MCX on Monday traded weak at Rs 99,860/10 grams, slightly up by Rs 22 or 0.22%, as the metal’s appeal as a haven has diminished due to the possibility of global tensions subsiding.
Further, silver September contracts were also flat, trading at Rs 1,13,945/kg, up by just Rs 2.
After trading above $3500 (~Rs 1,02,000) the week before, gold prices have dropped to their lowest level in more than two weeks, $3400 (~Rs 100,000)
According to data released Thursday, the July increase in U.S. producer prices was the largest in three years. The robability of a 25 basis point rate drop by the Fed in September is now 89%, down from almost 95% before the data’s release, according to traders.
Although a peace agreement for Ukraine was not reached during the highly anticipated weekend meeting between Russian President Vladimir Putin and US President Donald Trump in Alaska, Putin did consent to let the US and Europe offer Ukraine strong security guarantees as part of a future agreement to end the conflict. Trump is set to meet European leaders and Ukrainian President Volodymyr Zelensky later today, in an attempt to reach a speedy peace agreement“The general mood of the market is maintained by dovish forecasts from the US Federal Reserve and hopes that Trump will remove sanctions on Russia and invest instead. However, if the US-Ukraine negotiations go as badly as they hve in the past, risk sentiment may turn negative, which would probably increase the allure of gold as a safe haven,” said enisha Chainani, Head – Research at Augmont.
“Investors are anticipating Wednesday’s release of the Federal Reserve’s most recent meeting minutes, which may provide further context for the decision to maintain interest rates at their current level,” she added.
A short-covering rally in the US dollar, on the other hand, could present new downside risks for gold as traders may turn to profit-taking and repositioning ahead of the annual Kansas City Fed’s Jackson Hole Economic Policy Symposium and the Minutes of the July Fed meeting, which are scheduled for August 21–23. The likelihood of further tariffs, a weakening global economy, a relaxation of U.S. monetary policy, and the ongoing decline of the US currency all support gold’s long-term bullish outlook.
The US Dollar Index, DXY, was hovering near the 97.99 mark, gaining 0.14 or 0.15%.
How to trade gold?
Renisha Chainani believes that if gold continues its profit-booking, it may fall up to $3300 (Rs 97,500) this week, while, $3445 (Rs 1,00,500) is the strong resistance.
Meanwhile, silver is expected to trade in the range of $37.5(~Rs 1,12,500) and $39 9~Rs 1,15,500) this week.
Gold rates in physical markets
Gold Price today in Delhi
Standard gold (22 carat) prices in Delhi stand at Rs 57,952/8 grams while pure gold (24 carat) prices stand at Rs 61,800/8 grams.
Gold Price today in Mumbai
Standard gold (22 carat) prices in Mumbai stand at Rs 56,680/8 grams while pure gold (24 carat) prices stand at Rs 60,392/8 grams.
Gold Price today in Chennai
Standard gold (22 carat) prices in Chennai stand at Rs 56,728/8 grams while pure gold (24 carat) prices stand at Rs 60,488/8 grams.
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Gold Price today in Hyderabad
Standard gold (22 carat) prices in Hyderabad stand at Rs 56,736/8 grams while pure gold (24 carat) prices stand at Rs 60,528/8 grams.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)