The recent rally in gold prices has taken it to an all-time-high level aided by an array of reasons including the surging geo-political tension between the United States and China.
Gold price continued to march higher on Monday with the yellow metal trading above Rs 52,000 per 10 gram. The recent rally in gold prices has taken it to an all-time-high level aided by an array of reasons including the surging geo-political tension between the United States and China. On MCX, August gold futures rose 2% or Rs 1,000 to a record high of Rs 52,127 per 10 gram. Along with Gold, the week’s trading session started on a strong foot for silver as well, touching the 8 years high of Rs 64,849.
“Geopolitical tension between US & China and weakness in the dollar supports the bullions. Dollar is weakening against all major currencies at 93.80 levels. US Bonds yields are also low which supports safe haven demand for bullions,” said Anuj Gupta, DVP- Commodities and Currencies Research, Angel Broking. The rally in gold prices is expected to continue in the coming day with analysts expecting the yellow metal to surge even higher and reaching a fresh all-time high. “MCX Silver followed the same trend, hit another 4% buyers circuit and continuing with the up trend. Momentum will definitely be positive for the intraday,” said Jigar Trivedi, Fundamental Research Analyst, Anand Rathi Shares and Stock Brokers.
Investors have been rushing to safer havens of investment as the global economy takes a backseat nudged by the coronavirus and the resultant lockdown that kept the majority of the countries locked up in an effort to control the spread of the virus. To club this with a weaker dollar is acting as a catalyst behind the surge in gold price, analysts say. The measures taken by central banks across the globe is another factor aiding the rally with fear of inflation running high. “Low real yields make holding the Dollar very expensive.This explains the rally that we are currently seeing in equities and commodities. Gold in USD terms hit a new all time high in early Asia session today,” said Abhishek Goenka, Founder and CEO, IFA Global.
Sitting at a price of Rs 52,000 per 10 gram, analysts do not see this as an end to the rally in gold prices. “From a 6 months perspective, the price structure suggests strength and we envisage gold to test levels of close to $2000 an ounce in international markets or Rs 55000 per 10gms in the domestic markets,” Sugandha Sachdeva, VP-Metals, Energy & Currency Research, Religare Broking said earlier this week.