Gold prices declined on Tuesday (August 6) by ₹98 to ₹69,211 per 10 grams in futures trade.

Analysts attribute the drop in gold prices to weaker global indicators. In New York, gold prices remained flat at ₹2,444.50 per ounce.

Broader financial market selling and a worsened risk-off sentiment are contributing to the current decline.

Market concerns over a potential US recession and the Federal Reserve’s expected rate cut are impacting gold prices.

The CME Fed Watch tool suggests an 85% likelihood of a 50-bps rate drop at the September meeting.

Recent US economic data reveal a weakening manufacturing sector and decreased workforce demand.

The US unemployment rate has risen to 4.3%, its highest since November 2021, and the manufacturing PMI for July has contracted to 46.8.

Increased Middle East tensions have also influenced gold prices.

Following recent events, including missile attacks on a US base in Iraq, gold has seen significant price swings, with fluctuations of up to $100 per day.

Investment strategy

Renisha Chainani, Head Research at Augmont — Gold For All, advises investors to adopt a strategy of “buy on dips and sell on rallies.”

Current support levels are around $2,350 per ounce (₹68,000 per 10 grams) and $2,400 per ounce (₹69,000 per 10 grams), while strong resistance is seen at $2,500 per ounce (₹71,000 per 10 grams).

Recommendation for investors

• Monitor market trends: Keep an eye on global economic indicators and geopolitical tensions.
• Adopt a tactical approach: Consider buying gold during price dips and selling during rallies to capitalise on volatility.
• Stay informed: Watch for updates on US economic data and Federal Reserve decisions, as these will influence gold prices.