1 week ago
Gold Prices Retreat After Two-Month High as Outlook Splits
Gold prices went down a little after rising sharply the day before.
Investors sold some gold to lock in profits.
Gold had reached its highest price in more than two months.
The United States Treasury announced plans to buy more long-term government bonds.
This pushed bond yields and the dollar lower, making gold more attractive.
Gold does not pay interest, so it often benefits when interest rates and bond yields fall.
Some analysts think the decline is only a pause and that prices could rise toward $4,600.
Others warn that higher inflation, interest rates, bond yields, or a stronger dollar could slow the rally.
Spot gold fell 0.7% to $4,487.63 per ounce after reaching $4,525.79, its highest level since June 2.
US gold futures were largely unchanged at $4,545.60, while MCX gold edged up to ₹1,58,300 per 10 grams.
Gold’s rally followed the United States Treasury’s announcement of larger buybacks of long-dated government bonds.
Analysts said prices may consolidate above support near $4,400, although stronger yields or a dollar rebound could limit gains.
Technical analysts identified $4,600 as the next potential target after gold broke above its $4,340–$4,440 trading range.
- Who
- Gold investors, the United States Treasury, and commodity analysts including Kaynat Chainwala of Kotak Securities and Renisha Chainani of Augmont.
- What
- Gold prices retreated after reaching a more than two-month high, while analysts assessed whether the broader upward trend remained intact.
- Where
- International markets and India’s Multi Commodity Exchange.
- When
- Thursday, after gold surged more than 4% on Wednesday.
- Why
- Investors took profits after the rally; the rally had been supported by the Treasury’s larger long-term bond buybacks, lower Treasury yields, and a weaker dollar.
Bullish outlook
Cautious outlook
Meaning of the retreat
Bullish outlook
Kaynat Chainwala viewed the move below $4,500 as consolidation rather than a reversal of the broader bullish trend.
Cautious outlook
Profit-taking and the possibility of a rebound in Treasury yields or the dollar could limit further gains.
Price direction
Bullish outlook
Renisha Chainani said gold had broken above its $4,340–$4,440 range, with $4,600 potentially next; Chainwala identified $4,400 as strong support.
Cautious outlook
Hawkish Federal Open Market Committee minutes and officials’ openness to further tightening could cap prices if inflation remains persistent.
Support for gold
Bullish outlook
Continued central-bank buying, exchange-traded fund inflows, and renewed weakness in yields could preserve the upside bias.
Cautious outlook
Crude prices near multi-week highs amid the West Asia standoff could intensify inflation concerns and increase the likelihood of a hawkish Federal Reserve stance.
Key facts
- Spot gold
- Down 0.7% at $4,487.63 per ounce
- Recent high
- $4,525.79 per ounce, the highest since June 2
- US gold futures
- Largely unchanged at $4,545.60
- MCX gold
- Up slightly at ₹1,58,300 per 10 grams
- Key support
- Around $4,400 per ounce, according to Kaynat Chainwala
- Next technical target
- $4,600 per ounce, according to Renisha Chainani
- Treasury action
- Long-duration bond buybacks were increased by at least two times for 10- to 30-year securities
Quotes
Kaynat Chainwala
AVP – Commodity Research, Kotak Securities
“The hawkish FOMC minutes have complicated that picture, with several officials open to further tightening if inflation stays sticky.”
livemint.com
Sources
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