Gold prices today continued to rise to new highs in Indian markets, with some analysts forecasting that the yellow metal may touch the ?50,000 mark. On MCX, August gold futures hit a new high of ?48,982 per 10 gram today before seeing some profit-taking at higher levels. Currently, gold hovered at ?48,710 per gram in futures market.
In global markets, gold prices rose to their highest in nearly eight years today as a spike in coronavirus cases sparked concerns over the economic recovery from the pandemic and boosted demand for safe-havens. Spot gold hit its highest since early October 2012 at $1,788.96 in early trade while US gold futures were up 0.3% at $1,805.10 per ounce.
“The market sentiment is cautious on fast spreading of coronavirus around the global and concern of the second wave of infections. Also, there are worries over reigniting US-China trade war, giving a boost to safe-haven demand for gold. Today, the MCX Gold has hit a fresh all time high of Rs.48,982/10 gm,” said Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services.
“Currently the recent high in gold is acting as a crucial resistance and we may see small correction in prices till 47500/47000. However, the ongoing geopolitical tensions will boost safe-haven demand for gold and once it cross and sustains above 49000 then 49750-50600 is expected. Dips will find buying support until 47000 holds and prices will again bounce back towards 48500/49000 levels,” he added.
Reflecting high investor demand, holdings in the world’s largest gold-backed exchange-traded fund or ETF, SPDR Gold Trust, increased by 211.9 tonnes, or nearly 22%, in the second quarter.
Gold also tends to benefit from widespread stimulus from central banks because it is widely considered a hedge against inflation and currency debasement. U.S. Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell have pledged to continue to support the economy, which has been hammered by the pandemic.
Goldman Sachs had recently raised its forecast, expecting gold prices to touch $2,000 per ounce.
Nish Bhatt, founder & CEO, Millwood Kane International, said: “Easy liquidity by central banks across the globe has pushed interest rates down, making gold an attractive investment bet which is also considered a hedge against inflation and a safe haven in times of uncertainties. Trade tensions between US-China is another worry as it may delay economic recovery and lead to a further rise in prices of the yellow metal.”
Silver rates have also rallied recently. On MCX, silver futures hit ?50,891 per kg before seeing some profit-taking to fall to ?50,281.
“While in silver, MCX September prices will test its immediate resistance between 51,235-51500 areas. The counter needs to trade above these areas for a breakout towards 52400/54000 areas. Failure to trade above 51500 will trigger a correction towards 49750/48800 areas,” said Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services. (With
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