Gold’s correction extends to Rs 3000/10 gram in April. Has it made a near term top at life high?
correction in Gold prices, where the yellow metal has corrected by nearly Rs 3000 per 10 gram or 4% from the lifetime high is its biggest fall in nearly two years. Can we expect the trends to reverse or a top has been made? This is what multiple experts tell ETMakets as they spell out their trading strategy.
Notwithstanding the fall seen in yellow metal over the last two weeks, the rally in gold this year so far has been nothing short of spectacular. Gold futures on the MCX have climbed nearly 13% or Rs 8,000 per 10 gram on the year-to-date basis. The gains had been primarily on geopolitical tensions increasing the safe haven appeal of gold along with hopes of an early rate cut that triggered movement in the first fortnight of April. The month-to-date price rise still stands at 6%.
However the tables have turned with US inflation moderately rising in March and dashing hopes of a rate cut by June.
«Gold recorded its first weekly decline in six weeks and its biggest fall in two years as expectations of Fed rate cuts faded after the latest economic number from US, that put Fed policymakers into catch 22 situations, US Q1 GDP data sparked fears of stagflation as growth slowed, coming in weaker-than-expected at 1.6% from 3.4% while price index measures accelerated with the Core PCE Prices for Q1 surging to 3.7% from 2.0%, above the 3.4% forecast,» Jigar Pandit, Head Commodity & Currency Business, Sharekhan by BNP Paribas said.
It can be said that gold prices have formed a short-term top and we expect some more
