Gold Price: Gold offers an 8% return in 2023, providing an opportunity..

Gold prices are facing immediate resistance at ₹60,600 per 10 gm on MCX and $2,000 per ounce in international spot market. Breaching these levels can lead to a fresh leg of rally in the precious yellow metal.

Factors that fueled gold prices

Gold prices rose 8% in March and remained one of the best-performing assets in the first quarter of this year, reflecting buying exuberance due to expectations of a dovish US Fed, inflation worries, global growth momentum, and strong central bank buying.Gold is seen as a hedge against economic or geopolitical uncertainty, and weakness in the dollar index has caused it to continue its upward trend.Expecting US Fed to go further soft on interest rate hike, Nirpendra Yadav, Senior Commodity Research Analyst at Swastika Investmart said, “As the US economy is under pressure, investors are hopeful that the Fed will now be soft on interest rate hikes, strengthening safe haven demand.” He went on to add that after emerging from the COVID-19 restriction policy, China’s economy shows steady growth, increasing the physical demand for gold.

“Gold withdrawals from the Shanghai Gold Exchange have increased by 76 tons year-on-year, the highest since 2014. The rise in gold outflows from the exchanges indicates strong demand from the wholesale market. China reported the highest gold import in 2022 after 2018. The People’s Bank of China started official gold purchases in November and continued in February. An increase in the gold premium in Shanghai and London indicates further strength,” Nirpendra Yadav said.

Gold price outlook

On outlook for gold price in near term, Sugandha Sachdeva said, “The overall price setup still indicates further room for upside in the precious metal in the long term given that the rates are likely to peak out very soon which could be a boon for gold prices, but buying on some declines would be the apt strategy.”

“While considering the near-term outlook, prices seem prone to the risks of profit booking where the level of $2000 per ounce mark is acting as a major barrier in the international markets, while the Rs.60600 per 10gm mark remains near-term resistance in the June contract. Only a convincing move past these key levels would further lead to a flare-up in prices. With concerns about the US financial sector receding and revival of “risk on” trade in the global markets, gold prices may give way to some selling pressure in the coming days, where support is seen at Rs.58000 per 10gm mark and then Rs.56700 per 10gm mark,” Sugandha concluded.

Will gold price climb a new peak?

Expecting rally in gold price to climb a new peak in short to medium term, Anuj Gupta, Vice President — Research at IIFL Securities said, “Immediate support for MCX gold price is placed at $1,960 levels whereas $1,945 is major support for the precious yellow metal in international spot market. We are expecting fresh leg of rally in the precious metal as Dollar Index has come below 102 levels and it may break its current support placed at 100 levels. Gold price may rest $1,990 and $2,020 per ounce levels in near term and if it sustains above $2,020 per ounce levels, then we can expect it to first hit $2,050 and then $2,100 and $2,200 levels, breaching its current life-time high of $2,075 per ounce levels.”

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