Gold price today 7-05-2021: Yellow metal trades above Rs 48055—check target and support by expert

Gold price today 7-05-2021: Kedia Commodities says that Gold prices top $1,800, settle at highest since February as slipping bond yields and a slightly weaker U.S. dollar offered some support. Gold surged on the perception of permanently high inflation as the commodity price index soared to a lifetime high. The dollar dipped hitting its lowest point in three days, as global market risk appetite improved and traders looked forward to the April jobs report due on Friday for direction. US dollar index and US bond yield edged down as a part of normal market movement, but the sudden jump in Silver and Gold may be more related to surging commodity prices especially metals amid supply chain disruption and higher demand.

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Fed’s unlimited QE-4 and COVID stimulus/checks (CARES Acts), the broad money supply is now growing by around 30%, at the most rapid rate in the past 60 years will help Gold. Over the last three weeks, gold has attempted $1800 levels five times unsuccessfully, which further reinforces the strength of the resistance level, the key issue is the nominal 10-year Treasury yields has been edging lower and the real yield looks like it is headed back to -1% once again. Gold and silver bulls garnered support from Federal Reserve assurances of ongoing low rates overnight and the dollar showing a definitive reversal down, says Kedia Commodities.

Prithvi Commodities highlights said that Gold price above Rs 48055, could test Rs 48180 – Rs 48270. The Support price of Gold is at Rs 47800.

Global gold ETFs lost 18.3 metric tons in April, marking outflows for five of the past six months, according to the World Gold Council. Gold ETF investors liquidated 175mtns in the Q1, representing the largest level of net quarterly outflows since the first quarter of 2013. The outflows were “largely a reflection of a shift in investor sentiment towards gold since the beginning of the year, with gold being pressured by firm U.S. dollar, rising U.S. Treasury yields and growing enthusiasm around economic recovery amidst the ongoing rollout of vaccination programs, highlights Kedia Commodities.  

Kedia Commodities says that Gold underperformed year-to-date as economic recovery and risk-on sentiment continued.  Strategists at HSBC downgrade gold to neutral because they think it will be difficult for the precious metal to rally strongly from current prices amid now higher bond yields. The Fed plans to keep borrowing costs near 0% and maintain monthly asset purchases worth $120 billion until it sees “substantial further progress” towards full employment and its 2% flexible inflation target. Heavy government stimulus, gold is considered a hedge against potential inflation, but elevated Treasury yields have dulled the non-yielding bullion’s appeal this year.