Gold is at 1760 level, a kind of support for gold prices in the immediate term. In our update in September 2021, we had indicated 1720 and 1760 as the probable support levels for gold prices. There has been a slowdown in central bank purchases of gold in the last three months, and to add fuel to the fire, there have been net outflows from gold ETFs in the last few months. These factors pulled down gold prices which is now languishing at support levels. In addition to all this, gold prices move with US Dollar currency rates. In situations of Dollar strength commodity prices especially gold prices tend to move down and in times of Dollar depreciation gold price stend to surge. We have seen an uptick in US Dollar
currency rates in the currency markets of late, and this is resulting in lower gold prices. The outlook on US interest rates is one of hardening rates, and any rise in rates will curb the rise of gold prices. All the serious uncertainties around economic growth and economic activity, resulting from the pandemic, is probably behind us and with this clarity on the direction of the economy and markets it is less likely that gold will be able to make any progress during the rest of the year. Gold may benefit from a price rise or inflation if it becomes chronic, otherwise it could be only temporary gains.
