Gold Price Rally May Be Limited by Oil Volatility
The gold price has seen a significant rally in recent times, breaking free from its seven-week-old consolidation range of $3950-$4200. According to Praveen Singh, Head Currencies and Commodities at Mirae Asset ShareKhan, instead of chasing the rally, buying on dips may be a better strategy for gold right now.
The metal's price has risen due to dovish FOMC policies, the possibility of a Hormuz deal, and disappointing US nonfarm payroll reports. China's central bank has also been buying gold, with its holdings rising by 20 tons in July, the largest increase since October 2023.
The Strait of Hormuz situation remains volatile, and oil prices have risen due to Iran's demands for concessions from the US. However, the impact on gold prices may be limited unless oil surges sharply higher.