Gold Prices Dip as Investors Await US Inflation Data

Gold prices dipped as investors await US inflation data. The MCX gold rate hovers around ₹71,485, while spot gold trades near $2,321 per ounce. Experts advise a buy-on-dips strategy, citing potential Fed rate cut speculation if inflation data is positive.

Gold prices slipped a bit lower on Friday as investors wanted to wait for the release of US inflation data. A stronger US dollar weighed down values at the precious metal, while some investors hedged bets in the market pending the critically new economic data.

The MCX gold futures contract for August 2024 delivery opened lower at ₹71,422 per 10 grams on Friday morning and briefly touched an intraday low of ₹71,402. The price has since stabilized at around ₹71,485. In the global market, COMEX gold continued to trade near $2,331 per troy ounce, while spot gold was hovering at $2,321 per ounce.

According to Anuj Gupta, Head of Commodity & Currency at HDFC Securities, there exist two significant reasons pulling down the gold price today—soaring US dollar rates and impending data on inflation in the United States. He stated that until inflation figures come out, prices of gold would be range-bound.

According to experts, gold on the MCX is stuck in a price range of ₹71,000 to ₹72,000 per 10 grams, while on the spot front, the metal oscillates between $2,310 and $2,340 per ounce. Notwithstanding the current pressure, analysts have asked investors to follow a "buy-on-dips" strategy as good US inflation data may trigger speculations of a Federal Reserve rate cut in its March policy meeting.

The other major factor driving gold prices, which has kept the US dollar index above 106, was the slight weakening of 0.16% in the dollar index yesterday after robust US GDP data, adding further attraction to gold holders in other currencies.

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All eyes will be on how the crucial number, to be released in a few days, impacts both the dollar and gold prices. Hence, investors are advised to watch key support and resistance levels as ₹70,500 and ₹72,800 are significant price points for MCX gold.