Gold Falls to Rs 1,52,220 as Crude Oil Prices Plummet
MCX Gold fell to Rs 1,52,220 on Thursday as crude oil prices plummeted by 1.88% to Rs 7,803. This sharp drop in crude oil prices reduced the inflation-hedge argument that had supported gold's previous rally.
The connection between gold and crude oil is arithmetic: when crude falls sharply due to Iran deal signals, the inflation-hedge component of gold demand softens. Thursday's session saw MCX Gold try to extend Wednesday's rally but fail to sustain above Rs 1,53,900.
For Friday's session, Ankit Jaiswal, Senior Research Analyst at Univest, recommends entering gold on any COMEX weakness that brings MCX Gold toward the support level of Rs 1,52,000-1,52,500. If COMEX Gold is above USD 2,835/oz pre-market Friday, the gold price prediction for Monday becomes stable-to-positive.