Extending gains from last week, gold is set to post its best week since July this year supported by a weaker dollar.
Gold prices edged higher in India on Monday, in tandem with international gold prices as the dollar weakened. International bullion prices started marginally higher in Asian trade today supported by a weaker dollar and hopes of more stimulus measures under US President-elect Joe Biden. On MCX, gold December futures were trading nearly half a per cent or Rs 240 higher at Rs 52,407 per 10 gram. While silver December futures were ruling at Rs 66,336 per kg, surging 1.53 per cent or Rs 1,001. Analysts say that Biden and his team has already started working on plans to tackle the COVID-19 crisis. “The spotlight will also be on the Fed for further support to revive the economy. Overall the sentiment is likely to be positive,” said Jigar Trivedi, Fundamental Research Analyst, Anand Rathi Shares and Stock Brokers.
Extending gains from last week, gold is set to post its best week since July this year supported by a weaker dollar. On MCX, gold prices have rallied 4 per cent or Rs 1,500 per 10 gram in the previous week. Analysts say that gold is near to its resistance of $1965 and a breach above this level would take it to $1980 and above. “We expect gold prices to touch Rs 54,000 in MCX in the first half of 2021,” Bhavik Patel, Senior Technical Research Analyst at Tradebulls Securities, told Financial Express Online.
Gold prices on MCX hit a record high of Rs 56,191 per 10 gram and silver scaled to a fresh all-time high of Rs 77,949 per kg in August this year. Navneet Damani, VP, Motilal Oswal Financial Services said today the focus will be on the BOE and ECB governor speeches scheduled later in the day, which could bring in some volatility in the market. “Broader trend on COMEX could be in the range of $1900-1985 and on domestic front prices could hover in the range of Rs 51,900-52,750 per 10 gram,” Damani added.
What should investors do ahead of Dhanteras, Diwali?
Bhavik Patel recommended fresh buying for medium to long term perspective or holding to already owned gold during the upcoming festival of Dhanteras and Diwali as he expects prices to move forward only. According to Patel, two factors implicate bullish trend for gold, one is with Biden presidency, even with a divided house- Republic look to control the Senate and Democrats hold on to the house which will lead to more stimulus measure and second is ongoing political turmoil as Trump is not expected to give up which will lead to higher prices in gold.