By Dr. Renisha Chainani, Head- Research, Augmont – Gold for all
Due to worse-than-expected US initial unemployment claims data, which strengthens the case that central banks will soon be able to lower interest rates, gold has regained its positive momentum. The increase in demand for gold throughout the world was mostly caused by significant over-the-counter market investment, ongoing central bank purchases, and rising Asian demand.
The spotlight will be on US inflation in the coming days. The nation will release the April Producer Price Index (PPI) and Consumer Price Index (CPI), which are expected to decline from the previous 0.4% to 0.3% MoM and 0.3% MoM, respectively. These data often have a significant effect on the USD, even though the Fed bases its decision on a different inflation indicator.
Similar to gold, silver has had a resurgence of the larger bullish trend that breaks above the high at $29.80 (~Rs 86000) and challenges the previous resistance zone around $29 (~Rs 85000). Silver has recovered from its last swing bottom and, like gold, has not yet broken beyond overbought conditions on the RSI. There is support at $27.40.
Gold might witness a rise to an all-time high at $2450 (~Rs 74000), en way to the $2500 (~Rs 75000) figures, if bulls in the metal intervene at the psychological $2400 (~Rs 73000) level. Conversely, the initial downward objective may be found at the $2,340 (~ Rs 72000) resistance-turned-support level.
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