New Delhi [India], June 23 (ANI): Gold prices are expected to trade in a narrow range until some clarity arises in the key interest rates and other monetary policy measures in the US, said financial services firm Emkay Wealth Management in a report.
The yellow metal gold has been trading in the range of $1,810-$1,875 per ounce for the past one month, primarily due to the persistent inflationary pressures and the rising policy rates.
The stubborn and sticky inflation has forced central banks across the globe to hike rates aggressively and unwind the easy monetary policy to reverse the excess liquidity in the system.
The support level for gold is at $1,760 and $1,730 levels, and the upside may be capped at $1,930-$1,940 levels in the near term.
“Inflation has become a key risk to growth for economies across the globe. Inflation has been hovering near multi-decade high in the US and UK. Back in India, the whole inflation data stood at a level highest seen since 1994, CPI inflation too has been above the 6 per cent mark for 5 consecutive months,” the report said.
Historically, gold prices tend to gain during phases of high inflation and the commodity acts as a safe-haven asset for the investors.
Gold prices have risen nearly 2.30 per cent against a drop of 11 per cent in the S&P 500 index and a fall of 2 per cent for the Nifty 50 index.
Clearly, gold has outperformed the other asset classes due to the uncertainty created by the geopolitical tensions between Russia-Ukraine and a subsequent spike in international crude oil prices.
Gold is trading in a narrow range as the appreciation in the US dollar, in which the buyers and dealers deal, is pulling down the yellow metal. (ANI)