Weekly Outlook on Gold - 19 August 2022

Weekly Outlook on Gold
Gold Weekly Outlook

Commodities
by Sachin Gupta Last Updated: 2022-08-19T18:07:34+05:30

MCX Gold traded lower throughout the week and set a weekly low on Friday's trading session as a stronger dollar and expectations of more rate hikes by the U.S. Fed dented safe haven demand.

Gold Weekly Outlook

 

The dollar index was boosted after the comments on an interest rate hike by Federal Reserve officials that the federal bank would continue at a sharp pace of rate hikes this year to control stubborn inflation. However, the weak industrial production & retail sales data from China, higher inflation numbers in the U.K. and the tensions between the US-Taiwan raised concerns of sluggish demand & fear of recession. 

COMEX Gold futures dragged more than 2.3% on a weekly basis and slipped to a three-week low on Friday's session. The spot prices were trading near $1754 per ounce, after falling to its lowest since July 29 at $1752.77 levels. 

On a weekly chart, the COMEX Gold future has formed a Bearish Engulfing Candlestick pattern that suggests weakness in the counter. Moreover, the price has also tested the resistance at 100-weeks Exponential Moving Averages and settled below it. On the downside, gold has support at $1727 & $1696. While on the upside, the resistance is at $1800 / $1824 levels.

On the domestic front, MCX Gold prices were trading around Rs. 51520 on Friday's session after setting a low at Rs.51436 with a 2% weekly downfall. On a weekly chart, the price failed to breach the prior resistance at Rs. 52620 levels and witnessed selling pressure. On the daily timeframe, the price has slipped below the 38.2% Retracement Levels and chasing towards 23.6% at 51058 levels. 

So, based on the above technical structure, we are expecting a sideways move in the Gold for the coming week. On the downside, it may find support at 51000 or 50800 levels. While, on the upside, 52000 & 52620 will act as resistance for the Gold. 

 

Flash Manufacturing PMI

GBP

Flash Services PMI

USD

Core Durable Goods Orders m/m

USD

Prelim GDP q/q

USD

 

 

MCX GOLD (Rs.)

COMEX GOLD ($)

Support 1

51000

1727

Support 2

50800

1696

Resistance 1

52000

1800

Resistance 2

52620

1824

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About the Author

Mr. Sachin Gupta is a Senior Research Analyst at 5paisa, based in Mumbai. He has over 10 years of experience in Equity, Commodity research and strategies. 

Disclaimer

Investment/Trading in securities Market is subject to market risk, past performance is not a guarantee of future performance. The risk of loss in trading and investment in Securities markets including Equites and Derivatives can be substantial.

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