Gold falls 7% from August peak: Good time to buy?
What's the story
Gold prices have witnessed a significant decline of 7.11% from their August peak of $4,658 per ounce on August 25. As of September 22, the precious metal was hovering just above $4,327 per ounce. This marks a marginal dip of 0.36% from its previous close and a weekly decline of 1.57%. However, gold prices are still up by an impressive 8.83% from their yearly low of $3,976 recorded on July 16, according to TradingEconomics data.
Influencing factors
Factors influencing gold prices and demand
The recent dip in gold prices can be attributed to profit-taking amid rising US-Iran tensions and a stronger dollar.
The US dollar was trading at 95.65 against the Indian rupee on Tuesday (September 22), while crude oil prices rose by 1.05% to $101.39 per barrel in futures trading.
Despite these challenges, investment demand for gold remains robust in India with a significant increase in ETF inflows and digital gold purchases running near ₹25 billion a month.
Price resilience
Gold price forecast and investment advice
Despite the market fluctuations, gold prices have shown some resilience.
According to Augmont, spot gold is currently trading in a range of $4,250-$4,450 with a bullish bias.
The firm advises investors to "buy on dips near support and sell into rallies."
A break above the upper resistance could pave the way for further gains toward $4,600-$4,700 per ounce.