Gold's nemesis dollar, triggers Rs 2,800 fall from peak. Is there a silver lining?
gold could likely take a break from the ongoing bearish undertones in the medium term. The domestic prices are expected to remain steady on festive buying and a stronger dollar which will prop up the prices of dollar-priced commodities, says expert.
Globally, prices of gold have declined on dollar strength which has had a rub-off impact on the domestic prices as well.
Over the last three months, the dollar index (DXY) has risen by over 3% during which time the MCX gold has declined by 4.61% or by nearly Rs 2,800. Analyst Anuj Gupta, Head Commodity & Currency at HDFC Securities expects gold prices to remain range-bound in the near to medium term with the festive season lending support to the domestic gold prices.
He does not see a sharp slide in the prices despite the dollar index potentially starting an uptick.
While the dollar index which may head to the 106 level will prevent any steep upside in the gold prices, a festival-led buying could support the prices, he opined. The dollar index will be taking cues from the Federal Reserve's policy outcomes on September 20, he added.
Since August, Gold has been on a declining curve falling 0.33% or Rs 194 month-on-month in the previous month while by Rs 381 or 0.64% as of September 15.
In June, MCX gold futures fell 3.30% or Rs 1,987. July was an aberration when the gold futures gained 2.33% or Rs 1,357.
Despite the slippages, the returns from gold are at 7.23% or Rs 3,976 per 10 grams in 2023.
It was the best asset class in terms of one-year returns until April-May with 20% income on investments.
Praveen Singh, Associate Vice President, Fundamental Currencies and Commodities, Sharekhan called the upcoming Fed meet as an important event for the prospects of Gold. He said that
