Gold Price Rebounds from Three-Month Low. Should You Buy in this Rally?

Gold price has experienced a rebound after reaching a three-month low. In the international market, gold has an immediate support level placed at $1,910 per ounce, while on the Multi Commodity Exchange (MCX), the gold price has immediate support at $58,000 per 10 grams. This increase in gold price can be attributed to the weakness of the US dollar, which has reached a five-week low. According to experts, this decline in the dollar is a result of an aborted uprising by Russian mercenaries, raising concerns about the authority of President Vladimir Putin.

Continued Gold Price Rally

Gold has continued its rally for the second consecutive session as the US dollar remains on a decline. On the MCX, gold price opened at $58,493 per 10 grams and reached an intraday high of $58,530. In the international market, gold price is oscillating around $1,929 per ounce, logging an intraday gain of approximately 0.35%.

Similarly, silver price also opened higher on the MCX, reaching an intraday high of $69,573 per kilogram within minutes of the commodity market’s opening bell. In the international market, silver is oscillating around $22.95 per ounce, recording an intraday gain of 0.80%.

Demand for Safe Haven

The rise in gold price today is attributed to the weakening of the US dollar. Anuj Gupta, Vice President – Research at IIFL Securities, explains that the demand for gold as a safe haven has reemerged due to the weakness of the US dollar and uncertainties arising from the aborted uprising in Russia. Navneet Damani, Senior VP – Commodity Research at Motilal Oswal, adds that the recent recovery in gold and silver prices is supported by a stable US dollar and persistent uncertainties in Russia, although the possibility of interest rate hikes by the Federal Reserve to counter inflationary concerns may weigh on the appeal of precious metals.

Gold Price Outlook

Experts predict that gold and silver prices will continue to rise due to the uncertainties in Russia. In the international market, gold price has immediate support at $1,910 per ounce, while facing resistance around $1,955 to $1,960 levels. On breaching this level, gold prices may go up to $1,980 per ounce. Additionally, the average price for gold in 2023 is expected to be $1,890.

In conclusion, the gold price has rebounded from a three-month low, primarily driven by the weakening of the US dollar caused by an aborted uprising in Russia. Global political and economic uncertainties have also contributed to the increase in gold price, reinforcing its status as a safe haven asset. While short-term outlook indicates that gold prices may continue to fluctuate, sustained demand from central banks and geopolitical risks will continue to have a positive impact on the gold market. However, investors are advised to conduct their own research and consult qualified financial advisors before making any investment decisions.





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