Mumbai, Nov 15 (IANS) Gold prices are likely to further come down in the near future as sellers remain dominant with no near-term positive triggers, trade experts said on Friday, adding that the next lower target zone is looking more likely before this correction in prices of the precious metal is over.
While the US Federal Reserve has been continuing with rate cuts as inflation approached its 2 per cent target, the higher-than-expected consumer price index (CPI) reading (2.6 per cent compared to the expected 2.4 per cent) raises concerns that further cuts may be paused.
“This development added pressure on gold prices, which reacted negatively to the stronger dollar and the potential shift in Fed policy,” said Jateen Trivedi, VP Research Analyst, Commodity and Currency, LKP Securities.
In India, the gold prices have fallen from Rs 78,566 per 10 grams on November 6, when Donald Trump won the US Presidential election, down to Rs 73,740 per 10 grams on November 14 (Thursday), which is over 6 per cent drop, as per data from the India Bullion and Jewellers Association.
Sandip Raichura, CEO of PL Broking and Distribution, said the deal to go to a tariff war is virtually sealed and therefore the US dollar also gained substantially which is a negative factor for gold.
“As a consequence, gold smashed through the 2,602 USD barrier which was a pivot. A daily close below the prior trend low of 2,590 has confirmed a near-term bear trend and the next support comes in around 2,534 levels followed by 2,470 levels,” he said.
Gold’s weakness persisted with the price falling below $2,550 and near Rs 73,500 in MCX as the dollar climbed above 106.50 and edged closer to 107. The US CPI data fuelled the dollar’s strength.
Pranav Mer, Vice President, EBG-Commodity and Currency Research, JM Financial Services, said that gold continues to trade lower, weighed by a higher dollar and elevated treasury yield after US CPI data showed inflation remains sticky above the Fed’s 2 per cent target.
–IANS
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