Gold price today: After appreciating to its 18 months high on Thursday, Multi Commodity Exchange or MCX gold rate witnessed sharp downside movement on Friday. Gold April future contract at MCX ended Rs1273 lower on Friday and closed at Rs50,270 levels. Spot gold price ended at $1889 levels on Friday after scaling to its 17 months high of around $1975 per ounce levels on Thursday. According to commodity experts, market has discounted geopolitical tension caused by Russia-Ukraine war and now focus has shifted towards inflation and crude oil price movement. However, they maintained that one needs to keep an eye on Russia-Ukraine news as any military action from NATO can trigger sharp upside move in the yellow metal price. They said that buying around $1850 levels in spot market and Rs49,000 to Rs49,500 at MCX is advisable as some more dip in precious bullion is expected, provided there is status-quo in Ukraine-Russia crisis.

Focus shifts towards inflation

Speaking on the reason for sharp fall in gold prices across global commodity markets; Anuj Gupta, Vice President at IIFL Securities said, "Sharp rise in gold price was witnessed after Russian invasion of Ukraine and it seems that market has discounted the Ukraine-Russia war. However, gold investors are advised to keep an eye on Russia-Ukraine news as any military action by NATO may re-ignite the Russia-Ukraine war. But, it is highly unlikely as NATO countries have announced financial support to Ukraine that means they are in mood to extend moral support to Ukraine instead of military support."

Echoing with Anuj Gupta's views; Amit Sajeja, Vice President — Research at Motilal Oswal said, "Focus has now again shifted towards inflation and we need to remain vigilant on crude oil prices, US Fed meeting and expected interest rate hike by various global central banks. As inflation has touched alarming levels, Fed may continue its hawkish stance on interest rate hike. Even though, a 50 bps interest hike won't be enough to contain inflation, but I am expecting US Fed to increase interest rate in upcoming meeting in March."

Gold price outlook for near term

Amit Sajeja of Motilal Oswal said that US Fed meeting is around a fortnight away and hence gold may further come down towards $1850 to $1840 per ounce levels, an ideal level for investors to buy. At MCX, he expected gold price to come towards Rs49,500 to Rs49,000 per 10 gm range, where one can buy and hold for one month target of Rs51,500 per 10 gm levels. In spot market, Amit Sajeje expected gold price to go up to $1950 levels in the same period as US Fed interest rate hike won't be able to contain inflation.

For high risk investors who want to invest in gold, Anuj Gupta of IIFL Securities said, "High risk investors can buy MCX gold future contract at Rs49,700 levels for immediate short term target of rs50,500 and Rs50,700 levels maintaining stop loss at Rs49,300 levels." He said that spot gold price has immediate support at $1850 levels and spot gold price may go down up to $1850 levels and bounce back up to $1920 levels in near term ahead of US Fed meeting.

Rupee vs dollar

Anuj Gupta went on to add that rupee is expected to remain in the range of 74.50 to 75.50 against the US dollar, if there is no escalation in Russia Ukraine tension. In that case, gold price will be dictated by global triggers like inflation, crude oil and US Fed. He advised high risk gold investors to keep an eye on these triggers as well.