Gold Finds Support at $4,000/Oz Amid Cautious Market
After a volatile July, gold has finally shown signs of finding a base. According to Vedika Narvekar, Research Analyst - Commodities & Currencies at Anand Rathi Shares and Stock Brokers, the worst of the downside may be behind us.
The main challenge for gold in July was higher-for-longer interest rate expectations, which pushed treasury yields back towards multi-year highs. The US dollar also stayed firm and acted as a headwind for gold, but despite this, the precious metal repeatedly found support around $4,000/oz.
In India, gold has mirrored the international correction, with domestic prices up roughly 6% year-to-date (YTD) despite the international price being down 7% over the same period. The import-duty hike in May and rupee depreciation have cushioned local prices.
Early this week, gold started on a firmer footing due to a weaker US dollar, easing crude oil prices following renewed US-Iran diplomatic efforts, and improving risk sentiment. However, the market remains cautious with traders waiting for fresh economic data before taking aggressive positions.