Gold price outlook: Top 5 triggers that yellow metal may follow in short term

Speaking on the factors that may dictate gold price in short term; Sugandha Sachdeva, VP — Commodity & Currency Research at Religare Broking Ltd said, “A slew of factors will steer the prices of gold during the upcoming week. The first one will be the movement of crude oil prices. Any sharp upside in crude oil price will further add to inflationary pressures and underpin gold prices. Secondly, market sentiments would be dominated by the headlines surrounding the crisis in Ukraine. Peace between Russia and Ukraine remains farther than anticipated, and that shall continue to keep gold in demand for its safe-haven status. Besides, the movement of the dollar index shall also influence the direction of gold. Any major advance in the greenback shall limit upside momentum in gold prices. First-quarter GDP data from China and the Fed Chair’s speech on the global economy at an event organized by the IMF shall also remain on markets’ radar.”

Here we list out top 5 factors that will fuel gold price in short term:

1] Crude oil price: Inflation in US has hit fresh 40 years high and any upside in crude oil may further escalate inflation pressure on global economy. So, crude oil price may push gold price in spot and domestic markets.

2] Peace talks in Russia-Ukraine war: Gold prices have continued on an upwards journey for the second consecutive week, thriving due to the ongoing Russia-Ukraine conflict, as the peace efforts between the two countries are floundering. Any negative news flow in regard to Russia-Ukraine war may create fresh demand for ‘safe haven.’ So, gold investors and traders are advised to keep an eye on developments in Russia-Ukraine peace talks.

3] Dollar index: Gold price has continued to rally despite the inflows seen in the US dollar, considered a store of value during times of geopolitical crisis. So, besides movement in Indian National Rupee (INR) against the US Dollar (USD), one should keep a watch on the Dollar Index too. Any major advance in the greenback shall limit upside momentum in gold prices.

4] Wedding season in India: “Upcoming wedding season in India is expected to push demand for physical gold. According to commodity market experts, this domestic factor can single handedly pull yellow metal price northward. They said that wedding season may work as cocktail with international triggers like Russia-Ukraine crisis, global inflation, crude and natural gas price, etc.,” said Anuj Gupta, Vice President — Research at IIFL Securities.

5] US IIP data: After disappointing inflation data last week, whole world is eagerly waiting for US IIP numbers this week as it would indicate macro-economic status of the America economy. Any further disappointing figure from the US government would create fresh demand for ‘safe haven’ leading to sharp upside bounce in the yellow metal price.