Gold price dips ahead of US inflation data. US dollar rate in focus

Gold rate today witnessed selling pressure as investors await the release of the US inflation data on Friday. Gold futures contract on the Multi Commodity Exchange (MCX) for August 2024 expiry opened downside at ₹71,422 per 10 gm and intraday low of ₹71,402. However, the MCX gold rate witnessed some buying at the lower level and pared some early morning losses. MCX gold rate is currently oscillating around ₹71,485 mark. In the international market, the COMEX gold price oscillates around $2,331 per troy ounce while the spot gold price is around $2,321 per ounce.

Commodity market experts are of the opinion that the gold rate today is under pressure as investors await the release of US inflation data on Friday. The market is also keeping a close eye on the rising US dollar index, which has been sustained above the 106 level. The MCX gold rate is currently in the ₹71,000 to ₹72,000 per 10 gm range, and the spot market sees it oscillating in the $2,310 to $2,340 per ounce range. In light of these factors, experts advise investors to stick to a buy-on-dips strategy, as the market is anticipating positive US inflation data.

Triggers for gold rate today

Speaking on the reason for today's dip in the gold price, Anuj Gupta, Head of Commodity & Currency at HDFC Securities, said, "Soaring US dollar rates and US inflation data awaited today are the two major reasons that are dragging the gold price today. The gold price is expected to remain range-bound until the US inflation data is released on Friday. We are expecting positive US inflation data after the promising US GDP data."

Anuj Gupta of HDFC Securities emphasized that the upcoming US inflation data could significantly impact the market sentiment. A positive outcome may fuel speculation about a US Fed rate cut in the next meeting. Therefore, he advises gold investors to maintain a buy-on-dips strategy until the US inflation data is made public, underscoring the importance of this upcoming event.

US dollar index in focus

Kotak Securities advised gold investors to remain vigilant about the US dollar's movement. The dollar index weakened 0.16% after hitting a nearly two-month high in the previous session, making gold more attractive for other currency holders."

"Yesterday, we witnessed some correction in the US Dollar index after the promising US GDP data. This should be taken as a cue as positive US inflation data may trigger a correction in the currency market, leading to a sharp fall in the US dollar rates, which may lend support to gold prices at a lower level and trigger fresh buying in the precious metal," said Anuj Gupta.

Gold rate today: Important levels to watch

Anuj Gupta of HDFC Securities said that the MCX gold rate today oscillates between ₹71,000 and ₹72,000 per 10 gm. If it breaches below the ₹71,000 mark, the precious metal will find support at ₹70,500 and ₹69,800 levels. On the upper side, once it breaches the ₹72,000 hurdle, the gold price today may find resistance at ₹72,800 and ₹73,200 levels.

Disclaimer: The views and recommendations above are those of individual analysts, experts, and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.