Gold Price Under Pressure After Nearing Three Month High Levels

Gold prices have once again climbed key psychological level of above $1800 per ounce after the US Fed in its policy decision announced last week continued with its accommodative stance. At the same time, the bank has announced to reduce its bond buying per month which will in the long run impact gold prices negatively.

Abundant money supply, negative movement in the dollar index has been supporting gold prices of late. In trade today, gold found support after dollar retreated lower. In the previous day's trade, gains in gold price were seen even as the US posted good jobs data for October month better than street expectations.

At present, internationally spot gold was softened by a tad 0.23 percent at $1813.9 which may be partly owing to the gains in the US benchmark yield which again clinched levels close to 1.5.

Besides the US central bank, BOJ also hinted at the need to continued with its ultra-loose policy as inflation rises moderately and wage increase remains week. As seen amid the pandemic and given the near zero-interest rates, gold has got a boost as the opportunity cost of holding non-yielding bullion is reduced.

Nonetheless, given the pace of revival worth noting in the world over economy and improving risk on sentiment, gold will find it difficult to sustain the gains. Nonetheless, there are held different views which expect gold to hit new peak by next Diwali.

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