Silver futures have rallied 96 per cent from its March lows of Rs 33,580 per kg. Gold will see the top when silver hits fresh all-time high in COMEX. Silver rallying is an indication that the economy is picking up
Gold prices today again hit a new fresh all-time high of Rs 53,865 per 10 grams in India on Monday, on the back of rising coronavirus cases, which rushed investors to seek safe-haven assets. Also, the World Health Organisation (WHO) has warned that there might never be a ‘silver bullet’ for COVID-19 in the form of a perfect vaccine and the road to normality would be long, this further boosted yellow metal prices. On MCX, gold October futures rose Rs 148 to a new record high while silver September futures surged Rs 116 or 0.18 per cent to touch a day’s high of Rs 65,948 per kg. “Market is anticipating that COVID crisis isn’t going anywhere with cases going up globally and even if COVID crisis is behind us, the economy is going to be weak for a while, so the market is anticipating Fed to create more debt which is beneficial for gold,” Bhavik Patel, Senior Technical Research Analyst at Tradebulls Securities, told Financial Express Online.
Since March lows of Rs 38,500 per 10 grams, gold prices have rallied 40 per cent to Rs 53,865 per 10 grams. Gold prices held firm near record highs as concerns over the global economic fallout from rising COVID-19 cases offset pressure from a rebound in the US dollar. “MCX gold is looking bullish and we expect gold to continue further with an upward rally towards 55000-55500 level in the short term,” Rajesh Palviya, Head Technical & Derivatives, Axis Securities, told Financial Express Online.
Globally, spot gold was down 0.2% at $1,973.54 per ounce, down from its all-time high of $1,984.66 touched in the previous session. US gold futures rose 0.2% to $1,989.20. Among other precious metals, silver fell 0.1% to $24.22 per ounce, platinum rose 0.2% to $918.50 and palladium gained 0.3% to $2,090.21.
Silver rally indicates pick-up in economy
Silver futures have rallied 96 per cent from its March lows of Rs 33,580 per kg. Analysts say the gold market has not yet seen the top and there is more upside potential. “We believe gold will see the top when silver hits fresh all-time high in COMEX. Silver rallying is an indication that the economy is picking up since silver is primarily industrial metal so gold will have less room to go when Silver hits an all-time high. Another sign that the rally is under threat would be when the Fed starts raising rates which we believe would take some time- at least a year or more,” Patel added.
On the downside on MCX, Rajesh Palviya said that gold is having good support at around 53300-52800. “We feel if gold continues to hold above these support levels then we may witness bullishness to continue in near/short term and one should use minor corrective action as buying opportunity,” he added.
Meanwhile, the domestic equity market benchmarks BSE Sensex and Nifty 50 were trading nearly one per cent higher in today’s trade. Sensex was up 360 points or 0.97 per cent at 37,299, while the broader Nifty 50 index was ruling 98 points or 0.90 per cent up at 10,989.45.