Domestically MCX Gold too is trading at a 1-month low level Says Mr. Colin Shah, MD, Kama Jewelry
Perspective On Gold prices hitting a 1-month low by Mr. Colin Shah, MD, Kama Jewelry
The price of the yellow metal has hit a 1-month low of $1835. The immediate fall in the price of gold is the result of the economic data in the US. The PPI data - a key inflation metric rose in January (MoM). This has led to concerns about Fed introducing more extensive rate hikes to control inflation. The data also pushed the Dollar index towards the 104 level, a higher dollar makes gold buying more expensive.
A higher USD and rising rates make gold buying less lucrative. Domestically MCX Gold too is trading at a 1-month low level. It has slipped below Rs 56,000/10gm level in today's trade. Back home too, the inflation has suddenly shot up vindicating the RBI's latest rate hike, also sparking concerns that the central bank may not pause at the current level.
From a one-year perspective we expect gold prices to recover as inflation eases, and the central bank pauses on rates. MCX gold may trade in the range of 56,800-57,200, internationally $1960-80 by the end of the calendar year.
