Gold's Rise Likely To Continue As The Dollar Declines

Gold prices will likely go up further in the near term as easing US inflation may boost demand for the metal, but a sharp rally is unlikely, market experts have said.

Demand from top consumers in China and India also favours a price rise.

Gold prices on MCX on Friday rose 0.38 per cent to Rs 52,308 (December delivery). In the spot market (Ahmedabad), the price was Rs 52,217 per 10 grams. 

The domestic bullion market tracks global prices. In the global market, gold in the spot market rose $1,756.78 an ounce as the dollar depreciated, according to Reuters.

The dollar has declined in anticipation of less aggressive rate hikes by the Federal Reserve, given cooler inflation numbers.

The US Consumer Price Index (CPI) rose to 0.3 per cent against the September reading of 0.6 per cent. It also beat the expectation of a 0.5 per cent increase.

Hareesh V, Head of Commodity Research at Geojit Financial Services, said easing global inflation is expected to push retail physical demand for the metal. “Besides, a firm local market demand from top gold consumers China and India continue to offer support to the metal,” he added.

Rahul Kalantri, VP-Commodities, Mehta Equities, said he expects the metal to see some profit-booking. Any dip in the metal now is also seen as a buying opportunity.