World Gold Gold
Kathmandu Gold price may fall drastically. The price of gold in the international market is likely to fall further. The World Gold Council (WGC) said that if the price of gold falls below $3,857 per ounce, the next major support point will be at $3,500.
According to the latest report released by the Council, if the price of gold falls below $ 3,857, then there is a possibility of reaching $ 3,
500. This level is a decline of about 37 per cent from the high in January, according to the council’s analysis. The $3,500 level is seen as an important support point as the decline is in line with previous major recession periods.
In the international market, gold is currently trading at $ 4,063.80 per ounce.
The London Bullion Market Association’s (LBMA) gold price PM index fell 1% to $4,027 an ounce last week. The price of gold has decreased by 7.8 percent since the beginning of the current fiscal year.
According to the report, the change in interest rate expectations after the US Federal Reserve decided to keep the interest rate unchanged.
At the same time, oil prices and inflation concerns due to developments related to US-Iran tensions are also on investor watch.
With the new valuation of the market, the flow of investment in gold ETFs has slowed down and the net long position of gold in Comex has also decreased. However, options investors have reduced negative positions to some extent, partly due to the expiry of the contracts, the report said.
According to the Council, although the price of gold has been fluctuating within a limited range for the last one month, it has not been able to go above the downward trend since the beginning of March.
A drop below $3,943 an ounce would signal further decline, followed by a range of $3,857-$3,887 becoming an important technical support zone.
Meanwhile, the strengthening of the Japanese yen is expected to provide some relief to gold.
The yen has strengthened after the United States and Japan jointly intervened in the currency market. According to the Council, if the trend of a strong yen and a weak US dollar continues, it can support the price of gold.
The council said that the expectations of the US Federal Reserve’s monetary policy in the coming days will play a major role in determining the price of gold.
If the manufacturing and services sector indicators are strong in July, expectations that the Fed will adopt tighter policy may be stronger.
However, the employment growth rate is expected to be relatively weak.
The report also said that U. S.-Iran tensions could ease somewhat after U. S. President Donald Trump announced new talks with Iran, which could help ease concerns about further interest rate hikes. ANI
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