Gold To Trade Between The Broad Range of $1880 -$1960 In The Near Term: Report

The prices of yellow metal are anticipated to trade in the broad ranges US$ 1880 and US$ 1830 performing as significant support levels in the short term, according to research by Emkay Wealth Management titled "Navigator". Currently trading at US$ 1960, gold has been ranging between US$ 1880 and US$ 1960 for the past month. According to the study, gold could reach levels of $1880, but in the near term, it has strong resistance at $1830 and the US Fed's hawkish stance is expected to keep prices muted.

According to a survey by Emkay Wealth Management, gold ETFs saw outflows during the previous two months, but in recent weeks, a few inflows have started to trickle in, supporting the yellow metal. The trajectory of US interest rates and the movement of the US Dollar are two key elements that are intricately linked to the movement of gold. The expectation of rising interest rates has been favourable for the currency outlook.

"Gold gained ground based on the uncertainties around the US economic performance and the possibility of the economy degrowing substantially, but these uncertainties turned out to be false alarms as the US jobless claims data beat analyst expectations. However, the major concern among traders is the economic sluggishness and the magnitude at which is happening in some of the developed countries is not likely to push gold demand higher," says the report.

The Fed Chairman's last speech makes clear that rates must be raised in order to control inflation, and he additionally acknowledges the possibility of short-term below-trend growth as a result of interest rate moves. In the past three to five years, a variety of reasons have allowed investors to add gold to their portfolios. These include changes in geopolitics, interest rates, the likelihood of economic growth, the requirement to diversify portfolios, the increase in price level, etc. Apart from the generally gloomy prognosis for the global economy, inflation remains the only thing driving gold prices at the moment.

"More than this, the very hawkish stance of the US Fed is a matter of concern, as the Fed has already reaffirmed its commitment to keeping its inflation target of 2% intact, and the Fed will not rest until the goal is reached. The end result is that rather than inflation and uncertainties which could have given Gold an edge but the US Fed's fight against inflation has assumed greater importance after the Jackson Hole meet which will see gold trading in a narrow range in the near term," said Emkay Wealth Management in its report.