Gold for some time now is moving in a range and after the prices in international markets crossed $1800 per ounce mark there were anticipations that the bullish momentum for gold in the precious yellow metal is in the offing but now again gold in today's (July 27, 2021) trade has once again gone below $1800 per ounce and was last seen trading at $1797.25 per ounce.
Here we will discuss how gold performed in Calendar year 2021 so far and it's likely movement going ahead:
After stellar run up in the previous year 2020 to record highs of Rs. 56200 per 10 gm on the MCX in August, we are once again hitting August of 2021. So, here is how gold has performed since then and in this year 2021 in particular:
Why gold prices crashed below $1800 per ounce levels?
FOMC meet is due to start today and traders are on the look out for cues on monetary policy going ahead.
Dollar index is also hovering close to its peak and last as per marketwatch.com traded lower by 0.04% at 92.61 at 12:55 am EDT. Any gains in the dollar and US benchmark bond yield curbs major upside in gold.
Quarter by quarter performance of gold in 2021 so far
After record gains of gold in the previous year 2020, in the first quarter ended March of CY 2021, we saw gold prices crashing down from the opening levels of $1900 to $1744 in the international markets i.e. a drop of almost 8%. Likewise, gold in India in the retail market for 24K dropped from Rs. 49940 per 10 gm on January 1 to Rs. 44370 per 10 gm on March 31, implying a drop in price of 11%.
Likewise, from Rs. 44370 per 10 gm for 24K on April 1 gold price has moved to Rs. 46740 on June 30, herein making a gain of over 5%. And now since June 30 price of gold in the Indian retail market for 24 K gold has inched to Rs. 47870 per 10 gm as on July 27, 2021, implying a loss of 4% in gold price since January 2021. Internationally too prices are also just near to the price where they started in 2021. So, by and large in 2021 thus far as we will enter the eight month prices of gold have not moved substantially and are moving in a range.
Gold prices saw a pullback in June 2021
After the US Federal Reserve gave a hawkish signal of beginning to hike rates as early as 2023 as against the earlier 2024 call and provided for a better economic state, risk-on sentiment among investors reduced the sheen in the yellow metal. But now the rising delta variant cases globally and also the resurfacing of inflationary concern provided a boost to the yellow metal and hence capping any major downside in the precious metal.
|In India (24K gold in the retail market)||Internationally|
|January 1||Rs. 49940||$1900|
|March 31||Rs. 44370||$1744|
|April 1||Rs. 44370||$1708|
|June 30||Rs. 46740||$1778|
|July 27, 2021||Rs. 47870||$1797.25|
Yellow metal Gold's likely performance going ahead in 2021
Studying the monthly chart of gold, experts indicate that from the bullish pattern there is seen a trend of a potential bearish move. There is unlikely that the bullish momentum of 2020 is translated through into the year 2021 and there is seen a further congestion as the yellow metal finds it difficult to move away from the $1800/$1900 region. Further as per charts as we reach$1,700 per ounce with a low volume node following, any sustained move lower will require significantly less effort should the metal fall this far, said the report.