Gold prices have been on a notable upward trajectory, largely driven by the ongoing conflict between Iran and Israel, which has intensified safe-haven inflows into the precious metal. As of October 3, 2024, gold reached approximately Rs 76,114 per 10 grams, with analysts predicting a potential rise to Rs 78,500 due to escalating geopolitical tensions and expectations of interest rate cuts by the US Federal Reserve. Recent reports indicate that gold has surged nearly $150 in just two weeks, with current spot prices reaching approximately $2,656.05 per ounce. This increase is further compounded by rising crude oil prices and heightened geopolitical tensions. [f6246c7e]
Despite these gains, Daniel Ghali from TD Securities cautions that the market is currently overbought, with historical positioning levels at their maximum since July 2016. He notes that nearly 5 tons of gold were liquidated last week, indicating limited selling activity amidst strong Western investor sentiment fueled by concerns over inflation and currency debasement. Hareesh V from Geojit Financial Services emphasizes the safe-haven demand stemming from tensions in the Middle East, while Pranav Mer from JM Financial Services highlights the ongoing global economic sluggishness, leading central banks to add bullion to their reserves. [afdce6fb]
The market anticipates that gold could re-test the psychological resistance level of $2,000, particularly if Hezbollah enters the conflict alongside Iran. While the outlook remains bullish, Ghali warns that gold prices could potentially slide by $200 or more per ounce, suggesting a target buy price of $2,300 for investors looking to capitalize on future dips. In the MCX market, gold is currently in an overbought zone, and profit booking may occur as traders eye the resistance level. The author recommends going long with a target of 61,000 and a stop loss of 59,500. [6722d868]
As the geopolitical landscape evolves, Asian demand for gold is reportedly declining, which could impact future pricing dynamics. The interplay of these factors—geopolitical tensions, inflation fears, and market positioning—paints a complex picture for gold investors navigating the current climate. [f6246c7e]