TomorrowMakers

The RBI announced its monetary policy on Friday, and the Rupee witnessed the highest gain in the past 20 days.

Prices of Gold in Diwali

The recent week saw gold prices increase by 1.61% because the dollar index retreated from a record-breaking 114.77 level. At MCX (Multi Commodity Exchange), spot gold ended at 1,660/ounce and gold at Rs. 50,027/10gm. The INR (Indian National Rupee) also witnessed a rebound as the RBI (Reserve Bank of India) increased the repo rate by 50 bps to 5.900%. The RBI announced its monetary policy on Friday, and the Rupee witnessed the highest gain in the past 20 days. We saw the Dollar index close at 112.16, registering a 0.04% intraday loss in the session on Friday. Commodity experts say that the stance of the US Fed on increasing interest rates has been hawkish and central banks worldwide have become hawkish because they are concerned with the unethical increase in the dollar index, which led to a fall in the respective currencies. As a result, central banks worldwide are concerned about their national economy. It is why we expect interest rates to increase and should see the action by RBI (of increasing the repo rate) this way. They commented that today, the gold rates are on an upward trend, and the festive season will witness this trend domestically and internationally. They believe the spot gold might increase to $1,710 and MCX gold to ₹52,500 by this year's Diwali. 

Related: Is buying gold a wise investment?

Withdrawal in Dollar Index

Religare Broking's commodity & Currency Research Vice President Sugandha Sachdeva spoke about the global gold price increase. She said the gold prices bounced back from a highly volatile situation last week and closed with a rise of 1.61% domestically. Gold and dollar have an inverse correlation, and we saw it maintained. Initially, the precious metal made a fresh high in two decades of 114.77 and erased all of it to end at a loss of 0.71%. The stance and tightening cycle of the US Fed is the primary support to the dollar. Sachdeva said the withdrawal in the USD from the highs moved the money towards the gold's safety. The economic slowdown risk has also increased interest in gold. Gold got a cushion because the INR is at 82, a record low. 

Related: Is it a good time to buy gold?

What Prices Will Gold Reach By Diwali? 

IIFL Securities Research Vice President Anuj Gupta said the outlook on gold is positive due to the unethical rise in the dollar and measures taken by global central banks. The central banks worldwide might increase their interest rates. He expects the dollar index to break the 110 support and might reach 108 by Diwali this year. He advises short-term investors to buy and hold the gold until Diwali 2022. Sugandha Sachdeva also believes the economic slowdown fears are increasing interest in gold. She said that key support at Rs. 48,800/10gm has not been broken even though there was a significant fall internationally over the last six months. She believes the support level might not be breached, and interest in gold will keep increasing in the coming days. Any fall till around Rs. 49,500/10gm should be a buying opportunity for an Rs. 50,700/10gm target. Gupta said the gold spot's immediate support is at $1610 and might increase to $1710/ounce by Diwali 2022. He believes the gold prices will rise to Rs. 51,300/10gm shortly and Rs. 52,500/10gm until Diwali. 

Gold prices seem to have reversed from the low in April 2020 due to the pullback in Treasury yields in the USA. Gold might continue to increase as the RSI moves away from the oversold position. Gold prices might test the moving average, but the PCE (Personal Consumption Expenditure) might drag on gold as the core rate. 

The recent week saw gold prices increase by 1.61% because the dollar index retreated from a record-breaking 114.77 level. At MCX (Multi Commodity Exchange), spot gold ended at 1,660/ounce and gold at Rs. 50,027/10gm. The INR (Indian National Rupee) also witnessed a rebound as the RBI (Reserve Bank of India) increased the repo rate by 50 bps to 5.900%. The RBI announced its monetary policy on Friday, and the Rupee witnessed the highest gain in the past 20 days. We saw the Dollar index close at 112.16, registering a 0.04% intraday loss in the session on Friday. Commodity experts say that the stance of the US Fed on increasing interest rates has been hawkish and central banks worldwide have become hawkish because they are concerned with the unethical increase in the dollar index, which led to a fall in the respective currencies. As a result, central banks worldwide are concerned about their national economy. It is why we expect interest rates to increase and should see the action by RBI (of increasing the repo rate) this way. They commented that today, the gold rates are on an upward trend, and the festive season will witness this trend domestically and internationally. They believe the spot gold might increase to $1,710 and MCX gold to ₹52,500 by this year's Diwali. 

Related: Is buying gold a wise investment?

Withdrawal in Dollar Index

Religare Broking's commodity & Currency Research Vice President Sugandha Sachdeva spoke about the global gold price increase. She said the gold prices bounced back from a highly volatile situation last week and closed with a rise of 1.61% domestically. Gold and dollar have an inverse correlation, and we saw it maintained. Initially, the precious metal made a fresh high in two decades of 114.77 and erased all of it to end at a loss of 0.71%. The stance and tightening cycle of the US Fed is the primary support to the dollar. Sachdeva said the withdrawal in the USD from the highs moved the money towards the gold's safety. The economic slowdown risk has also increased interest in gold. Gold got a cushion because the INR is at 82, a record low. 

Related: Is it a good time to buy gold?

What Prices Will Gold Reach By Diwali? 

IIFL Securities Research Vice President Anuj Gupta said the outlook on gold is positive due to the unethical rise in the dollar and measures taken by global central banks. The central banks worldwide might increase their interest rates. He expects the dollar index to break the 110 support and might reach 108 by Diwali this year. He advises short-term investors to buy and hold the gold until Diwali 2022. Sugandha Sachdeva also believes the economic slowdown fears are increasing interest in gold. She said that key support at Rs. 48,800/10gm has not been broken even though there was a significant fall internationally over the last six months. She believes the support level might not be breached, and interest in gold will keep increasing in the coming days. Any fall till around Rs. 49,500/10gm should be a buying opportunity for an Rs. 50,700/10gm target. Gupta said the gold spot's immediate support is at $1610 and might increase to $1710/ounce by Diwali 2022. He believes the gold prices will rise to Rs. 51,300/10gm shortly and Rs. 52,500/10gm until Diwali. 

Gold prices seem to have reversed from the low in April 2020 due to the pullback in Treasury yields in the USA. Gold might continue to increase as the RSI moves away from the oversold position. Gold prices might test the moving average, but the PCE (Personal Consumption Expenditure) might drag on gold as the core rate.