Gold price prediction today: Gold is likely to trade with a positive bias in the near term. However, resistance is seen at $4000 (Rs 121,000, says Praveen Singh, Senior Fundamental Research Analyst- Currencies and Commodities at Mirae Asset Sharekhan. The analyst shares his views on gold price outlook and what levels investors should watch out for:Gold Performance:
- Spot gold posted a sixth straight weekly gain in the week ending September 26 as it closed with a gain of 0.29% at $3760 on Friday; it was up by 2% for the week.
- On September 29, the yellow metal hit a fresh record high of $3833 as the US Dollar Index weakened.
- At the time of writing this article, spot gold was changing hands at $3830, up 1.9% for the day. The MCX December gold contract at Rs 116,385 was up by 1.30%.
Data roundup:
- US pending home sales data released on Monday showed that sales in August rose by 4% Vs the forecast 0.4%.
- Much-awaited US PCE Price Index data, released on September 26, were largely mixed, and though elevated, remained in the recent ranges, which hardly affected the probability of the Fed cutting rates by 50-bps rate by year-end. Matching the estimate, core PCE Price rose 2.9% y-o-y (prior 2.9%) in August and 0.2% m-o-m; prior data was revised lower from 0.3% to 0.2%. Headline PCE rose from 2.6% y-o-y to 2.7% (forecast 2.7%); m-o-m reading also accelerated from 0.2% to 0.3% (forecast 0.3%). US real personal spending in August rose 0.4% Vs the estimate of 0.2% as July real spending was revised higher from 0.3% to 0.4%. University of Michigan Sentiment in August fell to the lowest level since May.
Dollar Index and yields:
- At the time of writing this article, the US Dollar Index was hovering around 97.92, down 0.25% for the day.
- Ten-year US yields at 4.139% were down 0.88%, while 2-year yields fell nearly 2 bps to 3.62%. US treasuries gained on slumping oil and rallying UK bonds.
- UK gilts were up as UK chancellor Rachel Reeves reiterated commitment to fiscal rules.
CFTC data:
- In the week ending September 23, money managers cut their net bullish bets on gold to 4-week low, while the short-only bets rose to five-week high.
Global ETFs:
- Total known global gold ETF holdings surged to a fresh cycle high of 96.6 MOz on September 26. Global gold holdings, having risen for five consecutive weeks, are up 16.62% YTD and are nearly 13% below the all-time high level of 111.09MOz recorded on November 6, 2020, in the wake of Covid pandemic. Next major ETF level, barring covid-related ETF inflows, is 107.04MOz reached on April 22, 2022, as Russia invaded Ukraine.
Trade and tariff developments:
- US President said he would levy substantial tariffs on any country that will not make its furniture in the US. In addition, he intends to levy 100% tariffs on movies made outside of the US. It is to be noted that earlier he has called for 100% tariffs on pharmaceutical imports on companies not producing in the US.
- These tariffs will come into effect from October 1.
Geopolitics:
- China, in a major shift, has reportedly told the Trump administration to officially declare that it opposes Taiwan independence.
- As per US vice president JD Vance, Ukrainian president Volodymyr Zelensky has asked the US to sell Tomahawks missiles to European nations that in turn would send them to Ukraine. Trump will take the final call.
- U.S. President Donald Trump will host Israeli Prime Minister Benjamin Netanyahu at the White House on Monday. It is to be noted that, of late, President has been repeatedly calling for Gaza ceasefire agreement.
Fedspeak:
- Cleavland Fed President Beth Hammack said markets remain bullish, yet consumer surveys show sharp declines as households are increasingly worried about jobs and inflation.
- Fed Governor Waller said that new technology should be welcomed in payments.
US government shutdown:
- The Federal government shutdown starting October 1 threatens to delay the release of key US data including nonfarm payroll data, though no major impact is seen on markets unless the shutdown extends for long.
Upcoming data:
- This week is packed with crucial US data like JOLTs job openings (Sep. 30), Conference Board consumer confidence (Sept. 30), ADP employment change (Oct. 1), ISM manufacturing (Oct. 1), nonfarm payroll (Oct. 3) and ISM services (Oct. 3).
Gold Price Outlook:
- Currently, major driver of gold prices is huge ETF inflow amid rising expectations of further Fed rate cuts.
- Apart from ETF inflows, gold is getting support from economic concerns due to tariffs and evolving situation on Russia and Israel fronts.
- As the Fed’s focus is primarily on the weakening job market, markets may not fall much before the nonfarm payroll report.
- Although somewhat overbought, gold is expected to trade with a positive bias. Strong nonfarm payroll report will hurt the Fed rate cut chances, which will be bearish for the yellow metal, so buyers need to put a risk mechanism in place. There may be some profit booking before the release of the US job report.
- Major resistance is seen at $4000 (Rs 121,000). Intermittent resistance is placed at $3900 (Rs 118,500).
- Support comes in at $3790 (Rs 115,100)/$3750 (Rs 113,900)/$3700 (Rs 112,400).
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MCX gold levels at USDINR rate of 88.72.
(Disclaimer: Recommendations and views on the stock market and other asset classes given by experts are their own. These opinions do not represent the views of The Times of India)
