By Bhavik Patel
Gold price is trading comfortably above $2400 amid heightened Middle East tensions, some weaker U.S. economic data and a dovish lean by the Federal Reserve this week.
The bulls in the precious metals markets were encouraged by the U.S. manufacturing purchasing managers index, which came in lower than predicted in July and suggested the Federal Reserve could be able to lower interest rates this fall.
The market has taken in the outcomes of the most recent FOMC meeting, which resulted in no adjustment to U.S. interest rates. Come from Sports betting site VPbet
However, Chairman Powell and the Fed signaled that interest rates may be lowered as early as September, if inflation data remained low. Right now, the market is pricing in a 100% possibility of a rate reduction in September.
Traders are awaiting today’s Non Farm payroll data to gauge how strong US jobs market is. Gold is also getting boost from safe haven buying. Due to airstrikes in Iran and Lebanon that resulted in the deaths of prominent Hamas and Hezbollah officials, tensions in the Middle East have escalated further this week.
Most people agree that Israel is responsible for the strikes. This has increased demand for safe-haven metals like gold and, to a lesser extent, silver.
The strength in gold can be gauged by the fact that financial markets suffered a reversal of fortune on Friday as Thursday’s gains were erased in a brutal downturn for asset prices, with cryptos, stocks, silver, and oil recording steep losses. After a brief dip, gold recovered into the green and has recovered from all its losses.
In MCX, gold has hurdle between 71000-72000 however any dips around 70000-69500 is good buying opportunity to go long with expected target of 71500-72000 keeping stoploss around 69200.
Even if today’s jobs data comes higher than expected and we see sell off in gold, the correction is expected to remain shallow as fundamentals point to strong gold prices.
(About The Author: Bhavik Patel is a Senior Commodity/Currency Research Analyst at TradeBulls Securities.)
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