New Delhi, July 1 (IANS) MCX Gold hit a fresh all-time high of Rs 48,982 per 10 gm on Wednesday, while gold prices have rallied nearly 24 per cent this year. The precious metal had the best quarter, April-June, in more than four years in terms of price rise.
Internationally, gold price is near an eight-year high, trading at around the $1,800/oz.
Nish Bhatt, Founder & CEO, Millwood Kane International, said that gold prices are up due to global uncertainty, and the rise in the number of new Covid-19 cases.
US Federal Reserve Chairman has stressed on the need to control the virus else it may affect the recovery of the U.S. economy.
Gold prices have rallied nearly 24 per cent this year, and had the best quarter (April-June) in more than four years in terms of price rise.
Bhatt said that 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.
The trade tensions between the US and China is another worry as it may delay economic recovery and lead to a further rise in prices of the yellow metal.
Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services, said the market sentiments are cautious on fast spreading of coronavirus around the global and concerns over a second wave of infection. Also, there are worries over the reigniting US-China trade war, giving a boost to safe haven demand for gold.
On Wednesday, the MCX Gold hit a fresh all-time high of Rs 48,982/10 gm and is hovering around Rs 48,910/10 gm. At the same time, MCX Silver continued to trade close to all-time high of Rs 50,000 per kg.
Gupta said currently the recent high in gold is acting as a crucial resistance and “we may see small correction in prices till Rs 47,500/47,000 per 10 gm.
However, the ongoing geopolitical tensions will boost safe haven demand for gold and once it crosses and sustains above Rs 49,000/10 gm, then Rs 49,750-Rs 50,600/10 gm is expected. Dips will find buying support until Rs 47,000 holds and prices will again bounce back towards Rs 48,500/Rs 49,000 levels.
Gold surged to its highest in nearly 8 years on Tuesday as mounting fears of a resurgence of new coronavirus cases kept safe haven demand for gold alive, setting the precious metal on path for its biggest quarterly gain since March 2016. Gold has given a return of 20 per cent in 2020 so far.
Navneet Damani, VP- Commodities Research, Motilal Oswal Financial Services, said the broader trend on COMEX could be in the range of $1,775-$1,805 and on the domestic front prices could hover in the range of Rs 48,550-Rs 49,200.
The positive US consumer confidence number also could not dampen gold’s rally. Uncertainties around the Hong Kong issue and a second wave of Covid-19 are increasing distress in the market, hence supporting the prices of the precious metal.
US Treasury Secretary Steven Mnuchin and Fed Governor Jerome Powell have pledged to do more for the US economy as it battles the enormous fallout of the virus outbreak. The market participants will focus on PMI numbers from major economies globally and private payroll numbers from the US, which will give a hint on the situation of the jobs market in the country.
Experts predict that with the current trend, gold may reach historic levels around Rs 65,000 per 10 gm in two years’ time.
Analysts expect domestic futures to touch Rs 52,000 per 10 gm in the next few months till Diwali.
–IANS
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