IGI Logo

Below the Perspective on gold by Ashish Rajodiya, Head of Commodities, PL Capital

Gold is holding below $4,300 an ounce, at $4,288 globally, after a sharp fall in the previous session, with MCX gold slipping to Rs 1,50,900 per 10 grams as a stronger dollar and surging Treasury yields squeeze the metal on both fronts. The dollar index has climbed to the 101 mark, its highest level in almost two months, while the US 10-year yield is trading near 5.11%, its highest since July 2007, after stronger-than-expected private-sector data reinforced the case for further tightening. Markets are now pricing in a 70% probability of another Fed rate hike in October, up sharply from 55% just a day earlier. Adding to the mix, Iran's president used his UN General Assembly address to warn that Tehran will not allow freedom of navigation through the Strait of Hormuz while sanctions remain in place, keeping a geopolitical bid under the market even as rate expectations pull the other way. With the Fed's tightening path now the dominant driver, the next test for gold is whether incoming US data keeps running hot — another strong print would likely open the door to a slide toward the $4,200s, while any sign of the labour market cooling, or a fresh escalation out of the Gulf, could quickly bring buyers back in.

Above views are of the author and not of the website kindly read disclaimer