Gold value prediction today: When will gold rates resume upward bullish trend? Check outlook

Maneesh Sharma, AVP - Commodities & Currencies, Anand Rathi Shares and Stock Brokers is of the view that gold prices are likely to resume their upward trend in the long run. He takes a look at the top factors for gold prices in the coming days:

Gold ended the last week marginally on the upside as mixed signals emerged from US macro cues. This was due to softer January Consumer Price Index (CPI) figures, which reinforced expectations that the Federal Reserve (Fed) could cut rates later this year.

The US Consumer Price Index rose 2.4% year-over-year (YoY) in January, slowing from 2.7% in December & coming in below the 2.5% forecast. On a monthly basis, consumer inflation moderated to 0.2%, down from 0.3% previously and under market expectations of 0.3%.

Key Highlights

• The US Consumer Pric...
• ...

Meanwhile US Nonfarm Payrolls released last week increased by the most in over a year, while the Unemployment Rate unexpectedly declined, pointing to a stabilizing labor market. Overall mixed physical demand from India and China, profit-booking booking by ETF Investors & Strong US macroeconomic data continues to cap the upside in the current week.

Demand for precious metals in the country has been frenetic in recent months, prompting authorities in the retail hub of Shenzhen to issue a stark warning against “illegal gold-trading activities,” ranging from apps offering leverage to retail investors to online live streams promoting bullion sales

China Market holidays & profit booking moves to keep Bullion’s sentiment muted in the current week; Dip buying interest could again emerge from lower levels in coming weeks.

Spot Gold (CMP $4937/Oz): Range Bound with dips towards $4,790 – 4,750/Oz

Spot Silver (CMP $ 74.75/Oz): Could dip towards $ 68 – 70/oz in 1 – 2 weeks.

Gold prices have experienced a choppy trade after regaining its ground towards $ 5000 in February due to thin trading volumes as China & some other Asian markets remain closed for public holidays this week.

Profit-taking after a previous 2.5% surge seen on Friday last week have also contributed to the decline.

Market movements this week could remain influenced by the holidays in China & other Asian markets amid anticipation of future rate adjustments. Also Asian currencies like yen seen gains this week, could see yen's weakening trend persisting unless the Bank of Japan adopts a more aggressive rate policy

Traders could also closely watch renewed nuclear negotiations between the US and Iran, along with US-led efforts to end the war in Ukraine, both set to resume later in Tuesday session.

Any setbacks could sway risk appetite and safe-haven flows.

Macro cues from US including US data on GDP & Personal consumption Expenditure (PCE) Inflation numbers combined with Fed meeting minutes scheduled today could continue to keep price direction range-bound in near term.

Meanwhile on a longer term basis of 1 – 2 months, expectations remain for gold to resume its upward trend, as the drivers behind a multiyear rally still remain in place. This includes geopolitical tensions, questions over the Fed’s independence, and a broader shift away from traditional assets such as currencies and sovereign bonds which could drive gold towards $ 6000/Oz in second quarter of the year