Gold Price Outlook: Gold prices rose to a one-month high during the week after testing key $1,800 an ounce levels in the spot market on concerns about a slowdown in global economic activity on weak factory activity data released from various economies. Deepened. Another key factor behind the recent surge in the yellow metal’s prices was the fall in the dollar index, where it moved closer to the 105 mark before seeing a significant rally and printing gains for the week. Furthermore, escalating tensions between China and Taiwan amid US House Speaker Nancy Pelosi’s visit to Taiwan, to dislike China, supported interest in gold as a safe haven.
According to Bullion Experts, Holistic Approach to gold price Positive but profit-booking is widely awaited after the dollar index bounced back and spot gold is expected to move towards $1,750 an ounce level. Hence, one has to be cautious about the possible triggers that could affect the movement of gold prices in the near term.
Here we are listing down the top 5 triggers that can affect the price of gold next week:
1]US CPI Data: “The main trigger for gold price would be the US Core CPI and CPI data for July indicating the inflationary trend in the economy. Annual inflation in the US rose to 9.1% in June, a new 41-year high. Upcoming inflation data will be significant as only a moderation in price pressure will mean that the Fed will slow down the pace of monetary tightening, said Sugandha Sachdeva, Vice President, Commodity and Currency Research at Religare Broking.
2]Dollar Index: “An eye will also be on the momentum of the dollar index. The greenback is seen to base at 105 points and is likely to remain a good bid, at least in the near term, which could be a significant headwind for gold prices. Conversely, if the dollar index breaks the crucial 105 mark, it will provide a push for gold to continue its upward momentum,” said Sugandha Sachdeva. He said the direction of the Indian rupee, which witnessed sharp volatility last week, would also be on the radar of investors and would affect the domestic gold prices.
3]US Fed Speech: “We have speeches from two key Fed officials next week that will shed light on the US central bank’s trajectory of monetary policy,” the Religare expert said.
4]US China Taiwan issue: “Following the Russia-Ukraine war, fresh geopolitical tensions between the US and China have escalated, which may keep gold demand up in the near future. Gold prices rise as tensions between the US and China over Taiwan continue to rise. The uptrend is expected to be supported.” Anuj Gupta, Vice President – Research, IIFL Securities.
5]Industrial numbers from Eurozone, others: Industrial production data from the UK and the Eurozone, China CPI and PPI data as well as the OPEC monthly report will provide ample indications for gold prices and the precious metal to remain volatile throughout the week.
Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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