Gold Price Today, 19 Aug: Gold prices fall on rate hike fears, may trade neutral to bearish; support at 51300

Gold Price Today, Gold Price Outlook, Gold Price Forecast: Gold prices were trading lower in India on Friday, on the back of weak global cues. On Multi Commodity Exchange, gold October futures were down Rs 136 or 0.3 per cent, at Rs 51,467 per 10 gram, against the previous close of Rs 51603, Silver September futures were down Rs 541 or 1 per cent at Rs 55,902 per kg. Globally, yellow metal prices slipped to a three-week low and were heading for their first weekly decline in five, as a stronger dollar and prospects of more rate hikes by the U.S. Federal Reserve dented bullion’s appeal, according to Reuters. Spot gold was down 0.2% at $1,755.89 per ounce, after falling to its lowest since July 29 at $1,753.68 in early Asian trading. For the week so far, the metal is down 2.5%. U.S. gold futures eased 0.1% to $1,769.20.

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Gold is failing to attract long buyers as market participants have been active sellers of gold owing to rising yields and dollar strength which has made precious yellow metal less attractive. Many Fed policy makers are of the view that more aggressive rate hike is needed to combat inflation which is worrying signs for gold. Gold is likely to test $1730 on the downside although in MCX, weak rupee is giving some cushion to gold prices. Expect gold to trade neutral to bearish today with support at 51300 and resistance at 51800.

Navneet Damani, Sr. Vice President – Commodity & Currency Research, Motilal Oswal Financial Services

Gold after covering some ground in the first half, slipped to a three-week low and were heading for their first weekly decline in five, as a stronger dollar and prospects of more rate hikes by the U.S. Federal Reserve dented bullion’s appeal. The dollar surged to a one month high against its major crosses amidst positive statements from Fed officials. St. Louis Fed President James Bullard said he is currently leaning toward supporting a third straight 75 bps interest rate hike in September. Similarly Fed President Mary Daly too supported a  50 or 75 basis points rate hike for sept. policy meeting In their July meeting minutes, Fed officials said the pace of future rate hikes would depend on incoming economic data, as well as assessments of how the economy was adapting to the higher rates already approved. On the data front, U.S. weekly jobless claims and phily manufacturing index came in better than expectations. Focus today will be on the UK Retail sales data and comments from fed officials.  Broader trend on COMEX could be in the range of $1730-1770 and on domestic front prices could hover in the range of Rs 51,100-51,850.

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Ravindra Rao, CMT, EPAT, VP- Head Commodity Research, Kotak Securities

COMEX gold trades marginally lower near $1770/oz weighed down by firmness in US dollar. The US dollar index has jumped to 1-month high on safe haven buying amid global growth worries, geopolitical tensions and concerns about health of European economies amid power crisis and persisting inflationary pressure. Also weighing on gold price is weaker investor interest as is evident from ETF outflows. However, supporting the gold price is a safe haven and persisting inflation concerns. Gold has corrected sharply after failing to build on gains above $1800/oz level and may remain under pressure as the US dollar holds firm despite ongoing debate about Fed’s monetary tightening.

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