U.S Fed Rate Hike expected to have a negative impact on Gold: Motilal Oswal


According to the Currency Insight report of Motilal Oswal Financial Services Limited (MOFSL), the U.S Fed rate hike is expected to have a neutral-negative impact on Gold, and a positive to marginally positive impact on Dollar, ahead of the Fed meeting. Since the beginning of 2022, Dollar has consistently moved higher on the expectation that the Fed will remain hawkish for this year and that officials at the central bank will continue to raise concerns over inflation. Technically, the dollar index is headed towards the 100.50 – 102 mark in the near future; however, on downside MOFSL expects the dollar index to find support near 96.50 and 95 levels.

On the other hand, Gold has erased off the war premium and is in a corrective mode. However, any surprise in the Fed meet could further weigh on the bullion prices. While resistance is seen at $1990 when it comes to Comex gold, it also has a support at $1870- $1880 mark. On the domestic front, Gold could see a strong support at 50,000; whereas 53,100 could be a resistance level.

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