Gold rate today: Yellow metal retraces from record high as US dollar index rebounds from seven-month low. Buy or wait?

Gold rate today: Following the bounce back in the US dollar index after the revision in the US GDP data, gold prices witnessed some profit-booking on the weekend sessions. Spot gold price retraced from its all-time high of $2,531 per ounce and closed around $2,503 per ounce. On the Multi Commodity Exchange (MCX), gold rate finished with a marginal weekly loss at ₹71,651 per 10 gm.

According to commodity market experts, Gold rates today are under pressure because of the rebound witnessed in the US dollar rates after a slight revision in the US GDP data. They said that the Personal Consumption Expenditures (PCE) price index rose by 0.2% month-over-month and 2.5% year-over-year in July, both in line with expectations. This signals moderate but persisting US inflation concerns. They said that gold prices today face a hurdle of ₹72,300, whereas it has made a strong initial base at ₹71,200 per 10 gm. Experts advised gold investors to remain vigilant about next week’s US job data as any improvement would further cool down the US inflation concern and boost gold prices in the aftermath.

Why have gold rates retraced from record highs?

Speaking on the reasons dictating gold rates today, Anuj Gupta, Head of Commodity & Currency at HDFC Securities, said, “Gold price today follows two major triggers: US dollar rates, US inflation news. Last week, gold prices came under pressure when a slight revision in the US GDP data triggered buying interest in the US dollar, enabling the US dollar index to rebound from the seven-month low. However, US inflation has cooled after the Jackson Hole symposium, and the market expects a US Fed rate cut in the upcoming US Fed meeting next month.”

Regarding last week’s gold price movement, Sugandha Sachdeva, Founder of SS WealthStreet, said, “Gold prices continued their positive momentum from the previous week, maintaining an overall upward bias. However, profit-taking from record highs of $2,531 per ounce in the international market led to marginal losses by the end of the week. The recovery in the US dollar index from a seven-month low added pressure on the precious metal. At the domestic markets, gold prices encountered resistance around the ₹72,300 per 10 gm mark, resulting in a slight decline.”

“The key highlight of the week was the US GDP data for the second quarter, which was revised slightly higher and fueled a rebound in the dollar. Additionally, the Personal Consumption Expenditures (PCE) price index rose by 0.2% month-over-month and 2.5% year-over-year in July, both in line with expectations. This suggests moderating yet persistent inflation, bolstering the case for a 25 bps rate cut at the Fed’s next meeting. However, the resilience of the US economy and ongoing inflation has reduced the likelihood of an aggressive rate cut next month, further strengthening the dollar index,” Sugandha added.

Gold price today: Important levels to watch

Sharing critical levels regarding MCX gold rates, Sugandha Sachdeva of SS WealthStreet said, “In the near term, gold’s gold’s momentum appears somewhat weak unless it can close above the key resistance level. On the downside, prices will likely find support at ₹71,200 per 10 gm and then at ₹70,200 per 10 gm. It may be prudent to wait for a price dip before adding gold as a strategic portfolio asset, as the long-term outlook remains favourable. The upcoming US jobs report will be closely watched for insights into the labour market’s health, especially after recent downward revisions to payroll data for the year ending March 2024, indicating a cooling labour market.”

“Spot gold price oscillates in the range of $2,480 to $2,530 per ounce, whereas the MCX gold rate ranges from ₹71,000 to ₹72,250 to ₹72,300. On breaching above ₹72,300 on a closing basis, MCX gold rate may touch ₹73,500 per 10 gm whereas the spot gold price may touch $2,560 per ounce once it breaches the immediate hurdle placed at $2,530 per ounce mark,” said Anuj Gupta of HDFC Securities.

Disclaimer: The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.