Gold prices have continued to fall for the third consecutive week now, with the Gold future rate for the June Contract ending at 76,860.29 shillings per 10 grams on Friday 6th May 2022.
Spot gold price ended around the 1883 per ounce mark. According to commodity market experts, gold prices are under pressure as the Dollar has sustained its 20-year high levels.
As was expected, the US Fed raised its benchmark rate by 50 bps last week, the most significant increase since 2000 in their fight against spiralling inflation. This means that gold prices will continue rallying.
Markets are worried about the surge in the dollar index, which continues to dent gold’s appeal as a haven.
The soaring inflation plaguing major economies and the risks emanating from the current tightening cycle, however, sounds like a major save because they continue supporting gold prices.
Spot gold price has taken support at 214,600 shillings levels, while MCX gold price has immediate support placed at 75,625.67 shillings levels.
Speaking on the continuous fall of gold prices, market experts say that even though gold is currently sliding, it still managed to witness a respite in the latter part of the week as the US Fed indicated a slightly less aggressive tightening of the monetary policy.
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This, however, might not hold on to the yellow metal as demand for the US dollar may continue to push the Dollar Index from 105 to 107 in the near term.
So, a strong dollar may continue to put a brake on the precious metal price rally. The yellow metal support may come down to 211,120 shillings per ounce levels.
As of 9th May 2022, the gold ounce price in Kenya is 218,694.72 Kenyan Shilling per ounce; gold gram price is 7,031.98 per gram 24K, 6,445.99 per gram 22K, 6,152.99 per gram 21K, and 5,273.99 shillings per gram 18K.
The dollar index, global inflation, the Russia-Ukraine conflict, and Covid cases in India and fiscal stimulus in China are some of the key triggers for the worldwide gold prices for the next week, as per experts.