Gold Prices Down 75,201 Shillings Per 10 Gram; Should You Buy, Sell or Hold?

Gold rates fell in the domestic market signaling weak trends in the global market. On Multi Commodity Exchange, gold futures fell to 75,201.77 shillings per 10 grams.

In global markets, the yellow metal was holding steady near 204,605.16 shillings per ounce, supported by a slight pullback in the US dollar and lower Treasury yields

Other precious metals like spot silver were steady at 2,205.45 shillings per ounce, platinum eased 0.2 percent to 103,438.74 shillings and palladium slipped 1.5 percent to 237,592.29 shillings.

Gold ounce price in Kenya as of 25^th July 2022 is 204,623.88 shillings. Gold gram price is 6,579.55 per gram 24K, 6,031.25 per gram 22K, 5,757.10 per gram 21K, and 4,934.66 per gram

Today’s Gold Prices in Kenya

Gold Unit        Gold Rate in Kenyan Shilling

Gram 24K        6,585.7 KES

Gram 23K        6,311.3 KES

Gram 22K        6,036.9 KES

Gram 21K        5,762.5 KES

Gram 18K        4,939.3 KES

Factors Affecting Gold Rates

1. Dollar Index and Bond Yields

According to market analysts, gold rates fell as the US dollar index and bond yields paused after the recent correction.

2. US Fed decision

Investors are now positioning for the Fed decision on Wednesday 27^th July 2022. Expectations of a Fed may either slow down the pace of rate hikes going ahead to address the challenges to the economy or raise the rates further. A 75-basis points rate hike has already been projected.

Though gold is seen as a hedge against inflation, rising interest rates increase the opportunity cost of holding bullion. Higher rates lift the dollar, making gold more expensive.

3. Weaker Investor Demand

The yellow metal is also pressurized by weaker investor demand and concerns about consumer demand.

Most of the investors have slowed down since they are still looking out for the FED decisions come Wednesday.

4. Shillings VS Dollar

The Kenyan shilling depreciated by 0.3 percent against the US dollar to close the week at 118.6 shillings, from 118.3 shillings recorded the previous week.

As a fall in the shilling leads to a rise in gold prices, investors are advised to keep an eye on this critical domestic trigger for the yellow metal.

5. Inflation

Investors are worried that the latest data—U.S. consumer inflation last month rose to 9.1 percent, could push the Fed toward more aggressive rate increases to cool down consumer and producer prices.

What’s next for investors; Buy, sell, or hold?

Many expect gold to bolster their portfolios against inflation, but it has fallen 5.5 percent this year. This should not make you worried though.

While most market participants still expect significant policy rate increases, some analysts argue that central banks may not tighten monetary policy as much as expected. Their reasons include potential economic slowdowns that may result in contractions, but also in some cases a switch from supply constraints to supply surpluses in non-commodity consumer sectors.

The yellow metal competes for investors’ interest with government bonds, which are stable and offer regular payouts.

Market researcher’s outlook puts gold on a bumpy path ahead. However, despite the steep sell-off witnessed for the last five consecutive weeks, gold prices have still managed to find a strong cushion.

If this holds, investors should expect a recovery trade to get underway in gold. According to commodity market experts, spot gold price is trading in the range of $1680 to $1750 per ounce, a range that has been working as strong support for international gold prices for the last two years

Investors are advised to capitalize on the current fall in the gold price to lower their average cost. Further gold always tends to provide stability to your portfolio and is necessary for portfolio diversification.