Gold Price Today: Yellow Metal Near A 3-Month Low; Good Opportunity To Buy?

Gold Prices Today: Yellow metal remained near a three-month low tracking a weak global trend in precious metals. On MCX, gold futures fell to Rs 50,050 per 10 gram in early trade, before recovering slightly to Rs 50,184. However, silver futures gained 0.21 per cent or Rs 113 to Rs 52,715 per kg. Gold remained weak in international markets and traded below the key level of $1,700 per ounce. A rally in the US dollar and firm US bond yields have put pressure on precious metals. Traders are awaiting key US jobs data, due later today, which could provide further clues on the size of the Federal Reserve’s next interest-rate hike.

Bhavik Patel, senior commodity/currency research analyst at TradeBulls Securities, said: “Buyers emerged once again near $1,690 as previously too we saw gold taking support around that level. However, a breach below $1,690 will take it to $1,670 and $1,650. In MCX because of the weak Indian rupee, gold is trading at four week low while in COMEX it is trading at six week low. Physical buying from China has increased and recession fears may give tailwinds to gold but don’t expect any strong return from the precious metal asset class this year because of the strong US Dollar and increasing yields of US Treasuries.”

According to Reuters, spot gold inched up 0.1 per cent to $1,697.80 per ounce, but was down 2.2 per cent for the week so far. US gold futures were flat at $1,709.10.

Sriram Iyer – Senior Research Analyst at Reliance Securities, said: “Gold & silver prices extended losses on Thursday with gold falling below the $1700/ounce level for the 1st time Mid-July as a rising dollar and expectations for aggressive interest rate hikes dented its appeal. The Dollar Index hit a 20-year high after US data showed a buoyantly strong economy, giving the Fed more room to raise interest rates and weighed on prices.”

Should you Invest in Gold?

Patel, said: “Right now investors are piling on safe-haven US dollars and Treasuries as it is giving more return than gold which does not provide any interest. However gold is looking attractive at current levels for any long-term gains. Short term we might see gold consolidating at current levels but any buyers having a view of more than 6 months could invest in gold to not only hedge their positions from equity assets but also safeguard their risk by investing in safe haven metals like gold during times of slowdown.”

Madhavi Mehta, Associate Vice President – Commodity Research, Kotak Securities Ltd., said: “Gold has come under severe sell-off in last few days and we may not see significant recovery unless there is a sharp correction in the US dollar. With Fed expected to continue with aggressive rate hikes, the US dollar may not fall significantly ahead of Fed’s meeting on Sept.20-21. Since price is near recent lows, there is a possibility we may see some pullback in gold however buying is still not recommended.”

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