Gold has been in a broad range of 1760 level to 1860 level during the last one month. The only factor that is supporting gold at this juncture is the rise in inflation and the consequent erosion of purchasing power. There has been a significant moderation in commodity prices, and this is due to the strength in the US Dollar as most of the commodities are quoted in terms of Dollars, and therefore, any Dollar strength brings down most commodity prices. Currently, at 1770, gold may test lower levels close to 1720/30, despite the market expecting the worst inflation numbers in the US for many decades. The broader gold demand trends indicate an overall fall in gold demand across segments by 7 %. The ETF outflows in America and Europe continue to affect the market sentiment adversely and pulls down the prices. The central bank purchases of gold for their reserves are still happening but in the last two quarters the quantum and pace of buying has been quite moderate. The other retail aspects of demand like jewellery, bar and coin investments showed an uptick, though not large enough to undo the degrowth in the other segments
