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Gold Prices May Reach $1,710 per Ounce Before Diwali, Analysts Say

Strategic Insights

— 2 min read

As the dollar index continues to slide, gold prices are expected to surge to $1,710 per ounce before Diwali, according to bullion market specialists. This forecast comes on the heels of a 1.6% rise in gold prices last week due to hawkish central banks and the dollar index's decline from a record high of 114.77. Analysts are predicting a continued uptrend in gold prices, citing the US Fed's ultra-hawkish approach and global economic downturn fears as key factors driving demand.

Key Takeaways:

  • Gold prices rose 1.6% last week due to hawkish central banks and the dollar index's decline from a record high of 114.77.
  • Reserve Bank of India (RBI) announced a 50 bps repo rate rise to 5.90% on Friday, which could lead to a further rise in gold prices.
  • Religare Broking's Vice President of Commodity & Currency Research, Sugandha Sachdeva, stated that the US Fed's tightening cycle and ultra-hawkish approach have helped the dollar index this year, but gold prices have continued to rise due to its negative connection with the dollar index.
  • Anuj Gupta, VP-Research at IIFL Securities, predicts that the dollar index will break 110 and rise to 108 by Diwali 2022, leading to a rise in gold prices.
  • Experts predict that gold prices may reach $1,710 per ounce before Diwali, with MCX gold prices likely to rise to 52,500.
  • Sugandha Sachdeva advises short-term investors to buy gold till Diwali, citing the support for gold purchasing due to global economic downturn risks.
  • Anuj Gupta also advises short-term investors to buy gold at $1,695 per ounce on the spot market and 51,300 on MCX.

Statistics:

  • Gold prices rose 1.6% last week due to hawkish central banks and the dollar index's decline from a record high of 114.77.
  • The US dollar's recent decline caused money to move into gold, with global economic downturn fears also boosting gold purchasing.
  • The Indian Rupee's depreciation to a historic low of 82 cushioned gold prices last week.
  • Religare's Sugandha Sachdeva forecasts spot gold prices to rise to $1,710 per ounce by Diwali.
  • Anuj Gupta predicts MCX gold prices to rise to 51,300 in the short term and 52,500 by Diwali.
  • Spot gold support is at $1,610 per ounce, with a projected rise to $1,710 per ounce by Diwali.

Sources:

  • Reuters
  • Reserve Bank of India (RBI)
  • Religare Broking
  • IIFL Securities
  • Sugandha Sachdeva, Vice President of Commodity & Currency Research, Religare Broking
  • Anuj Gupta, VP-Research, IIFL Securities

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