Gold price has come back from all time high. Should you buy or wait for further downside?

According to market experts, We Dollar index and US bond yield have rebounded from the oversold zone and this has put an end to the rally in gold prices. They said that the yellow metal saw some buying during the mid-session over the weekend, when the dollar index moved below 103 levels for a brief period. However, he added that the overall bias for gold price is positive and one should maintain the strategy of ‘buying on dips’ and avoid taking any short positions in the precious bullion metal.

due to dip Sleep On Prices Last Week, Anuj Gupta, Vice President – Research IIFL Securities said, “In the past week, U.S. Dollar Rates and US bond yields saw a bounce back from their oversold zones. This put a brake on the rally in gold prices and profit booking started. Buying interest was seen in gold during the mid session on Friday when dollar index declined below 103 level. But, the US dollar recovered soon and hence gold again saw profit booking in last few hours of trade on Friday.

On higher divergence in gold prices last week, market expert Sugandha Sachdeva said, “The divergence was mainly seen on the back of rupee weakness, with the domestic currency depreciating 0.84 per cent against the US dollar. Aggressive rhetoric from various Fed During the week, officials highlighted the need for more rate hikes in their effort to bring down inflation, which was a key factor, which suppressed gold prices. Markets are now reiterating Fed terminal rate expectations, which has prompted the greenback to move towards a one-month high. Acted as a headwind for gold prices.”

“The post-Diwali rally in the precious metal has started to fade as there is room for further rate hikes. However, fears of an economic slowdown due to rate hikes still support the precious metal prices. Short-term US Treasury yields have crossed higher than long-term yields, indicating danger for the US economy,” said Nirpendra Yadav, Senior Commodity Research Analyst Swastik Investmart,

“European banks stopped selling gold, and emerging economies such as Russia, Turkey and India bought. Central banks are increasingly buying gold because it maintains its value in turbulent times, and unlike currencies and bonds, it is not dependent on any issuer or government. Data from the US this week, inflation (CPI) on Tuesday, retail sales on Wednesday and PPI on Thursday will be important for the price of precious metals.

Advising to buy on dips in the near term, Anuj Gupta said, “Avoid taking short positions in gold. Gold prices are around the corner.” 56,600 is a good buying area for short term target from 57,000 57,100 level. However, stop loss should be maintained 56,350 level.” He said that spot gold in the international market has taken support near $1,835 levels, while facing resistance at $1,890 an ounce. On crossing the upper hurdle, gold prices May go up to the level of $1,920.

Speaking on the gold price outlook for the near term, Sugandha Sachdeva said, “Going forward, the key support for gold remains intact. 56,500 per 10 gram mark and $1,860 an ounce, which could tempt buyback interest and fuel prices again. However, any breach of the mentioned support will pave the way for a potential target 55,500 per 10 gram mark for the precious metal.

Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint. We advise investors to do due diligence with certified experts before making any investment decision.