Gold Prices Fall Over 4% In A Month: What Lies Ahead For The Yellow Metal

Gold price internationally is lamenting and lamenting with now over 4% fall in a month's time to the tune of almost $77 per ounce. In the international markets spot gold at the time of writing this copy at around 9:42 am IST was trading again with a cut at $1730 per ounce.

Yesterday important data on inflation revealed in the US provided that inflation has hit the highest in over 41 years. This clearly points to the fact that the US Federal Bank shall continue with its rate hike plans to combat the scorching inflation. In fact reports point to the fact that the rate hike shall be of a larger extent as against earlier expected. In July meet on 26-27th as per the CME's Fed Watch tool there also is a possibility that Fed would or can increase rates even by 100 bps. 1 bps is one-hundredth of a percentage point.

CPI data led gold to fall to $1740.5 per oz level in the previous trading day

CPI data was released just around the time trading in gold begins in the US markets. Gold after opening lower fell to day's low of $1704.5 per oz within just 15 minutes of trading session to again later gain some strength.

Back in India gold is more or less steady

Defying the trend overseas, gold in India after the previous week's sharp losses are more or less steady. This is on depreciating rupee which has hits its new low today. Rupee depreciation favours gold domestic and this is the case at the moment.

Gold price trajectory going ahead

There is seen to be more selling pressure for gold in the short term with support placed at $1710 per oz and strong support at $1650 per ounce level. Meanwhile, on the MCX, the support is at Rs. 50,600 per 10 gm. Last at the time of writing this copy, gold August futures traded at Rs. 50,606 per 10 gm.