Analysts say hopes of fresh policy easing measures from the central banks and escalating geopolitical uncertainties also lifted the sentiments of the yellow metal.
Gold prices rose today after a one day blip, as the US economy recorded a worst quarterly plunge of 33 per cent annualized rate in the April-June quarter. Besides, rising COVID-19 cases and low-interest rates pushed investors to seek safe-haven counters. On MCX, gold October futures were Rs 409 or 0.77 per cent higher at Rs 53,189 per 10 grams, while the silver September futures were ruling at Rs 63,619 per kg, up Rs 949 or 1.51 per cent. “Overall fundamentals look bullish as the market got its first look of second-quarter US GDP which came lower than expected and the worst quarterly GDP reading since it began being recorded in 1947. Data pointing towards slowing pace of recovery which is positive for gold and silver,” Bhavik Patel, Senior Technical Research Analyst at Tradebulls Securities, told Financial Express Online.
Also, any uncertainty regarding the US presidential election, whether it will be delayed or as on schedule will also play well for precious metals, say analysts. “Bulls are just catching their breath before another push towards $2000. We reiterate to buy on any significant dips as the rally is not yet over,” Patel added. Globally, gold prices surged on Friday en route to its best month in more than four years as the dollar slid further after dismal US data added to doubts about a swift recovery from the pandemic-induced economic slump, driving investors towards the safe-haven metal, according to Reuters. Spot gold was up 0.4% at $1,966.31. US gold futures rose 1% to $1,959.70.
Analysts say hopes of fresh policy easing measures from the central banks and escalating geopolitical uncertainties also lifted the sentiments of the yellow metal. “Gold’s bullish outlook will remain intact due to increased demand for safe assets amid surging pandemic cases and a weaker US dollar. Immediate profit taking cannot be ruled out due to weak physical demand and record-high prices,” said Hareesh V, Head Commodity Research at Geojit Financial Services.
Among other metals, silver was up 0.1% at $23.56 an ounce, platinum eased 0.2% to $900.82 and palladium dropped 0.5% to $2,073.54. “The sentiment may stay positive during the intraday due to soft dollar,” said Jigar Trivedi, Fundamental Research Analyst, Anand Rathi Shares and Stock Brokers. The US will release Core PCE Price index, Personal spending and Michigan consumer confidence in the second session which may cause more volatility in the evening session. “Amid this volatility, we recommend to use NSE options tool to hedge since gold in July has gone up by more than 9% and we don’t rule out a technical correction although the undertone is positive,” Trivedi added.