Gold prices on record-breaking streak, scale new record high to top Rs 56,000 per 10 gm; should you buy?

By: |
Updated: Aug 07, 2020 10:42 AM

With today's gain, gold prices are now 46 per cent up from March lows of Rs 38,500 per 10 grams, while silver has now rallied over 132 per cent from Rs 33,580 per kg touched in March this year

gold, silver, gold rates today, gold pricesOn a year-to-date (YTD) basis, gold has delivered a return of 43.20 per cent while silver has given a return of 62.48 per cent

Gold prices scaled a fresh peak of Rs 56,191 per 10 grams on Friday, rising for the sixth consecutive day, on the back of the international rates where yellow metal was set for the ninth straight weekly gain. The gold prices were boosted by worries over global economic fallout from spiking coronavirus cases and a softer dollar. Silver is also at multi-year highs and hit a fresh lifetime high of Rs 77,949 per kg. “Even though both gold and silver are overbought, there are no signs of topping out on charts. Technically both are due for some correction after the massive rally,” Bhavik Patel, Senior Technical Research Analyst at Tradebulls Securities, told Financial Express Online.

After hitting record highs, both gold and silver slipped into the negative territory. On MCX, gold October futures were trading flat at Rs 55,840 per 10 grams, while silver September futures declined Rs 330 or 0.43 per cent to rule at Rs 75,722 per kg. According to Patel, some overdue correction with today’s US key economic data of Non-Farm Payroll or continuation of rally till $2100 and $30.50 in COMEX can be witnessed. “Our year-end forecast is around Rs 60,000 in MCX Gold and Rs 88,000 in Silver,” said Patel.

With today’s gain, gold prices are now 46 per cent up from March lows of Rs 38,500 per 10 grams, while silver has now rallied over 132 per cent from Rs 33,580 per kg touched in March this year. On a year-to-date (YTD) basis, gold has delivered a return of 43.20 per cent while silver has given a return of 62.48 per cent. Analysts expect some profit booking today. “Investors’ focus will be on the U.S. nonfarm payroll data due later in the day. Profit booking may come on the table but the fundamental background is bullish,” said Jigar Trivedi, Fundamental Research Analyst, Anand Rathi Shares and Stock Brokers.

On COMEX, silver prices are at a 7-year high. Globally, spot gold was up 0.3% at $2,068.32 per ounce. US gold futures rose 0.5% to $2,078.70. Among other precious metals, silver jumped 2.6% to $29.68 per ounce, while platinum dropped 0.9% to $988.76 and palladium climbed 0.5% to $2,232.40. Bullion has rallied more than 35% in 2020, putting it on track for the biggest annual gain in over four decades, as the health crisis, negative real rates, a weaker dollar and geopolitical risks spark a flight to precious metals, according to a Bloomberg report.  

Should you buy gold?

“We urge traders not to trade with leveraged positions in MCX as we are in a herd mentality where everyone is talking about going long. In medium term to long term, we are still bullish but in the short term, we would recommend traders to book some profits and keep their position light. At the current rate, we are reluctant to give advice of taking long positions and participants should wait for any meaningful correction before taking any position,” Patel advised.

(The investment advice in this story is by the respective research and brokerage firm. Financial Express Online does not bear any responsibility for their advice. Please consult your investment advisor before investing.)

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Karnataka farmers urge Centre to exempt ‘Bengaluru Rose’ onions from export ban
2Cane crushing in Maharashtra to begin from October 15
3Govt again cuts import duty on masoor dal