Gold price dips on US Fed's rate hike fear. Right time to buy?

Gold rate today: On account of stronger than expected US inflation and labour data, market is buzz about 25 bps rate hike by the US Fed in its upcoming meeting next month. This led to slide in gold price in early morning deals in Asian and Indian markets. Gold future contract for June 2023 on Multi Commodity Exchange (MCX) opened lower but soon witnessed some buying interest and went on to hit intraday high of ₹59,900 per 10 gm levels within few minutes of market opening today.

What's dragging gold price today?

Speaking on the reason for slip in gold rate today, Anuj Gupta, Vice President — Research at IIFL Securities said, “Gold prices are mainly sliding due to the market buzz about US Fed's rate hike in upcoming meeting next month. After stronger than expected US inflation and labour data, the US Fed is likely to raise interest rate and market is expecting up to 25 bps interest rate hike in next months' US Fed meeting."

Anuj Gupta went on to add that rebound in the US treasury yield is also a reason for dip in gold price today.

Opportunity for bottom fishing?

On advice to gold investors in regard to current fall, Amit Sajeja, Vice President — Research at Motilal Oswal said, “Gold rate today has immediate support placed at $1,975 to $1,980 per ounce levels and the strong support for the yellow metal is place at $1,930 levels in international spot market. I am expecting gold price to remain a sell on rise asset where $2,000 to $2,010 zone is expected to work as major resistance for the precious bullion metal."

On advice to those who believe in bottom fishing, Amit Sajeja of Motilal Oswal said, "Fresh investment in gold can be initiated at around $1,960 to $1,950 levels as fresh rebound in the yellow metal may take place from those major support levels.

On gold price outlook in domestic market, Anuj Gupta of IIFL Securities said, "Gold price has immediate support placed at around ₹59,450 to ₹59,500 per 10 gm levels whereas major support for the yellow metal is placed at ₹58,500 per 10 gm levels. Long term investors can wait for further fall as ₹58,500 to ₹58,800 would be a good supply zone for bottom fishing maintaining stop loss at ₹57,800 per 10 gm levels.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.