Gold prices (CM:XAUUSD) are up at the time of writing as they defied a stronger dollar (DXY). This rise was fueled by the market’s anticipation of interest rate cuts later in the year. In fact, the Federal Reserve expects to reduce rates by 75 basis points in 2024.
However, the upcoming release of the U.S. PCE Index this Friday, the Fed’s preferred inflation gauge, could influence these expectations. Forecasters are predicting a slight uptick in February’s annualized rate to 2.5% from January’s 2.4%, while the core index is anticipated to show a decline.
At the same time, India is seeing a dramatic decrease in gold imports, projected to drop over 90% in March from February. This marks the lowest level since the pandemic due to record prices dampening demand. Indeed, jewelers and refiners are cutting back on purchases as there is ample supply from existing stock, further influencing the global gold market dynamics.
This significant decline, with imports potentially falling to between 10 to 11 metric tons from 110 metric tons, hints at a softening in global gold price rallies and could aid in narrowing India’s trade deficit while supporting the rupee.
Is Now a Good Time to Buy Gold?
Using TipRanks’ technical analysis tool, the indicators seem to point to a positive outlook for gold. Indeed, the summary section pictured below shows that 16 indicators are Bullish, compared to six Neutral and zero Bearish indicators.
