Gold price prediction : Gold prices are likely to be weighed down by global developments in the near –term, says Manav Modi, Senior Analyst, Commodity Research at Motilal Oswal Financial Services Ltd. Here is his outlook for gold prices in the coming days:
Gold prices fell last week as a stronger dollar, profit booking, easing US-China trade tensions dented safe-haven demand, with investors cautiously tracking major central bank meetings for fresh monetary policy cues. Dollar index inched towards the 100 mark, hitting a three-week high, while the USDINR strengthened, supporting domestic bullion sentiment.
After, US and Chinese officials outlined a trade framework for Presidents Trump and Xi to finalize later last week, easing fears of renewed tariff escalation, leaders met and gave hope to market regarding a ease off in the trade war. China is expected to delay its rare earth licensing regime and resume US soybean purchases, signaling improving trade relations. Meanwhile, the Federal Reserve cut rates by 25 bps to 3.75%–4.00%, second reduction this year, and announced an end to QT effective December 1.
However, Chair Powell’s cautious tone and lack of commitment to further cuts pressured bullion, as markets reduced the odds of another rate cut in December. The US shutdown continues to cloud key data releases, adding uncertainty to the outlook.
Over the weekend, Fed injected ~29.4B, indicating short term funding stress and an interesting move just as they announced end of QT from December 1st. Also, China removed a key tax break that earlier allowed gold retailers to offset VAT on gold brought from the Shanghai Gold exchange.
Similarly, comments from China regarding the trade talks last week are still pending and further updates regarding the same could provide further weigh on prices.
Stance: Range bound; Rs 118000 - Rs 125000
(Disclaimer: Recommendations and views on the stock market, other asset classes or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India)
Gold prices fell last week as a stronger dollar, profit booking, easing US-China trade tensions dented safe-haven demand, with investors cautiously tracking major central bank meetings for fresh monetary policy cues. Dollar index inched towards the 100 mark, hitting a three-week high, while the USDINR strengthened, supporting domestic bullion sentiment.
After, US and Chinese officials outlined a trade framework for Presidents Trump and Xi to finalize later last week, easing fears of renewed tariff escalation, leaders met and gave hope to market regarding a ease off in the trade war. China is expected to delay its rare earth licensing regime and resume US soybean purchases, signaling improving trade relations. Meanwhile, the Federal Reserve cut rates by 25 bps to 3.75%–4.00%, second reduction this year, and announced an end to QT effective December 1.
However, Chair Powell’s cautious tone and lack of commitment to further cuts pressured bullion, as markets reduced the odds of another rate cut in December. The US shutdown continues to cloud key data releases, adding uncertainty to the outlook.
Over the weekend, Fed injected ~29.4B, indicating short term funding stress and an interesting move just as they announced end of QT from December 1st. Also, China removed a key tax break that earlier allowed gold retailers to offset VAT on gold brought from the Shanghai Gold exchange.
Similarly, comments from China regarding the trade talks last week are still pending and further updates regarding the same could provide further weigh on prices.
Stance: Range bound; Rs 118000 - Rs 125000
(Disclaimer: Recommendations and views on the stock market, other asset classes or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India)
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