Despite disappointing US retail sales data and the US dollar climbing to a 5-month high, the gold price rally on Tuesday received continued support from the Iran-Israel conflict. Gold prices today on the Multi Commodity Exchange (MCX) opened higher and reached an intraday high of ₹73,169 per 10 gm shortly after the commodity market’s opening bell. In the international market, gold prices are hovering around the $2,380 per troy ounce level.
Anuj Gupta, Head of Commodity & Currency at HDFC Securities, commented on the outlook for gold prices today, stating that the overall outlook remains positive. He highlighted the rise in geopolitical tensions due to the Iran-Israel conflict in Gaza, which is expected to sustain the gold price rally. Gupta suggested that any dips in gold rates today should be viewed as buying opportunities.
Gupta also noted that the hotter-than-expected US retail sales data on Monday indicated strong consumer spending in the US, potentially fueling inflation. This, in turn, may prompt US Federal Reserve officials to delay an interest rate cut.
Regarding the US dollar rates, Gupta mentioned that they are continuously rising, with the US dollar index nearing the 106.50 level in the early morning session on Tuesday. Despite the US dollar reaching a 5-month high, investors are seeking safe-haven assets amidst the escalating geopolitical crisis in the Middle East. Consequently, Monday’s dip in gold prices was viewed as a buying opportunity by gold investors.
Royce Vargheese Joseph, Bullion & Energy at Kotak Securities, highlighted that COMEX gold prices eased on Monday as the yield on the US 10-year Treasury note edged up to above 4.5%. Concerns in the Middle East temporarily eased due to US-led efforts to prevent conflict escalation after Iran’s attack on Israel over the weekend. However, traders continue to focus on prospects that interest rates will remain elevated, with the likelihood of a Fed rate cut in September currently standing at around 72%.
Disclaimer: The views and recommendations expressed above belong to individual analysts or broking companies and not to LegalParivar. Investors are advised to consult certified experts before making investment decisions.
