Gold, which had a dazzling run in the past few weeks, may run out of steam in the next two-three months, finding strong resistance at $1,050 per troy ounce in the international markets, according to a research submitted by Kredent Capital Market Academy.
Although Comex prices dropped to $955 per ounce on Thursday after touching a high of $ 995 on Tuesday, fluctuations will continue to remain at a higher level with investors still rallying behind gold due to its appeal as a safe haven investment. ?Gold is fighting against a currency like the dollar and once its starts to strengthen, prices are bound to come down,? Vivek Bajaj, director, Kredent, told FE, adding that the ?risk- reward ratio? for the metal had already turned unfavourable and would be instrumental in bringing prices down.
Gold will also come under pressure because there are some positives coming out of the US economy. With Germany?s decision to liquidate its gold reserves for cash, this would bring more selling pressure leading to a down ward revision in prices.
The Kredent report further said that although in this week gold prices were down by almost $ 40 per ounce from a peak of over-$1,000 per troy ounce last Friday, it is still not an indication of any cooling trend as prices have moved up by $16 since Monday.
?Although many in the market feel that gold will move up to $1,500 per ounce in the near-term, we feel that it would find strong resistance at $1,050 in the next 2-3 months,? Bajaj added.