Gold investors, brace yourself for another bumpy week. The bullion will remain under pressure in the next few days as investors will keenly follow the inflation numbers of the United States, scheduled on July 13.
On the Multi-Commodity Exchange (MCX), gold price future ended the previous week at Rs 50,810 for 10 grams, logging over 2 per cent weekly loss. The US dollar had cooled down from two-decade highs, taking some weight off the safe-haven metal.
The rising dollar price, June consumer price data of the United States and future commentary from the United States Federal Reserve and crude oil prices are likely dictate bullion price next week.
Gold price across the world is largely dominated by the US dollar. The price of gold is inversely related to the value of the US dollar. Amid growing recession risks, investors have opted for the dollar instead of the precious metal. This had pushed the greenback to fresh two-decades high last week. Experts believe the US dollar will keep this upward momentum in the next few days. If the dollar increases, gold will become more expensive in the other currencies.
“MCX gold prices are expected to trade with a negative bias amid elevated dollar index. MCX Gold price is trading below the mean levels of Rs 50,900. As long as it sustains below this level, it is likely to correct towards mean-2 sigma levels of Rs 49,900 in the coming sessions,” said ICICI Direct in a note.
All eyes will be on the US inflation data next week. Economists expect that consumer price index will hit a fresh 40-year high of 8.8 per cent in June, according to a poll conducted by Reuters. The monthly core index is, however, likely to decline to 5.8 per cent from 6.0 per cent in May.
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