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In recent sessions, there has been considerable profit-taking in gold prices as the likelihood of rate reduction by the US Federal Reserve drops. Concerns about the likelihood that officials won't cut rates soon have been brought about by the hawkish tone in the minutes of the most recent Fed policy meeting.
According to a report by PTI, speculators trimmed their holdings on Friday, causing the price of gold to drop by RS39 to RS71,538 per 10 grams in futures trade. With a trading volume of 7,184 lots, gold futures for June delivery on the MCX closed down by RS39 at RS71,538 per 10 grams.
The decline in the price of precious metals was ascribed by analysts to weak global cues.
According to a PTI report, gold was trading 0.15 percent higher globally at USD 2,363.20 per ounce in New York.
Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities, highlighted that fact that the gold has traded weak this week, experiencing a significant selloff from RS74,350 to RS71,500, a drop of more than RS2,800 from weekly highs.
"This decline is primarily due to the reduced likelihood of the Fed cutting rates early, as indicated by the recent meeting minutes. Despite this pullback, the overall rally in gold remains strong, and this week's decline should be viewed as a buying opportunity, with base support at RS69,000. If prices fall below RS69,000, a further selloff towards RS66,000 could be expected," said Trivedi.
As hopes for US interest rate cut started to wane, gold prices increased on Friday but were on track to dip for the first time in three weeks, according to a Reuters report.
Although bullion set a record high of $2,449.89 on Monday, it has subsequently dropped by almost 5%, Reuters said in its report.
Overseas buyers found greenback-priced bullion less expensive as the dollar index gradually declined.
According to an ANI report, Manoj Jain, the CEO of Indore-based Prithvi Finmart, stated that by year's end, global gold prices are expected to be between USD 2,500 and USD 2,600. On the short run, he sees gold trading at RS76,000 on the Indian market, and by year's end, at RS80,000.
He claimed that the demand for gold is being supported by the central bank of China as well as by retail purchases.
He said that all the fundamentals were good for purchasing.
Anand Rathi Shares and Stock Brokers' director of commodities and currencies, Naveen Mathur, said that the US general elections are scheduled for November and that inflation is still high, so there is less chance of a rate decrease in the near future, which might put pressure on gold prices. As a result, the MCX July futures contract's gold prices will likely challenge their strong support, which is located between RS70,200 and RS69,800 per 10 gm.
In light of international concerns, Mathur said that the negative might not hold true next month. Furthermore, gold prices are supported by long-term fundamentals, and purchasing may continue at lower levels.
In the next one to two months, Mathur anticipates fresh highs for gold.