Gold Price Forecast: Anticipated Increase in Gold Rates – Is Now the Right Time for Investment?
Gold prices are projected to rise significantly in the coming months, with predictions suggesting a potential peak of $3,800 (approximately Rs 134,000). Praveen Singh, a Senior Fundamental Research Analyst at Mirae Asset Sharekhan, advises investors to consider purchasing gold during price dips rather than chasing after the current rally. This forecast comes amid fluctuating market conditions and various economic indicators that could influence gold’s trajectory.
Current Gold Market Performance
As of the latest reports, spot gold is trading at $3,682, reflecting a 1% increase for the day. The metal recently achieved a record high of $3,685, surpassing its previous peak of $3,674 set on September 9. This surge follows a disappointing report from the Quarterly Census of Employment and Wages (QCEW), which revealed a downward revision of 911,000 jobs over the past year. Additionally, the MCX October gold contract is priced at Rs 110,294, marking a rise of approximately 0.90%. Over the week ending September 12, spot gold recorded a weekly gain of 1.58%, extending its winning streak to four consecutive weeks, closing at $3,643.
Economic Indicators Impacting Gold Prices
Recent economic data from China has raised concerns about the country’s growth prospects. Retail sales in August grew by only 3.4%, down from 3.7% in July and below the anticipated 3.8%. Furthermore, fixed-asset investment growth has slowed to 0.5%, the lowest recorded for this period outside of the COVID-19 pandemic. These figures cast doubt on China’s ability to meet its GDP growth target of 5% unless further stimulus measures are implemented. In the U.S., the Empire State manufacturing index for September recorded a disappointing -8.70, significantly lower than the forecast of 5, marking the worst performance since June.
Global Trade Dynamics and Currency Fluctuations
Ongoing discussions between U.S. and Chinese representatives in Madrid are focused on various issues, including trade, national security, and the popular app TikTok. A potential meeting between former President Trump and Chinese President Xi Jinping is also being considered for October. Meanwhile, China has initiated an anti-dumping investigation into certain U.S. chips primarily used in smartphones and electric vehicles. In another development, India and the U.S. are set to hold trade talks in New Delhi on September 16 to address ongoing trade disputes.
The U.S. Dollar Index has dipped to 97.30, down nearly 0.30%, ahead of the Federal Reserve’s monetary policy decision scheduled for September 17. This week is critical for the markets, as the Fed is expected to announce a reduction in the overnight Fed fund rate, potentially by 25 basis points. Additionally, other central banks, including the Bank of England and the Bank of Japan, are also expected to announce their monetary policies this week.
Future Gold Price Outlook
Looking ahead, analysts predict that gold could reach $3,800 in the coming months, with support levels identified at $3,600, $3,550, and $3,500. Interim resistance is noted at $3,700. Investors are encouraged to buy during price dips rather than chasing the current rally. The upcoming Federal Open Market Committee (FOMC) meeting could lead to a hawkish rate cut, potentially causing a temporary correction in gold prices. However, given the current instability in the U.S. labor market, any downside is expected to be limited. Overall, the gold market remains a focal point for investors amid fluctuating economic conditions and geopolitical developments.
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