Gold prices in India jumped over one per cent on Monday, taking cues from the international prices where yellow metal hit eight-week high
Globally, gold prices were supported by weak dollar and concerns about a surge in COVID-19 cases. Image: PTI
Gold prices in India jumped over one per cent on Monday, taking cues from the international prices where yellow metal hit eight-week high. Globally, gold prices were supported by weak dollar and concerns about a surge in COVID-19 cases which forced many countries for tighter restrictions despite vaccine rollout. On MCX, gold February futures were trading Rs 556 or 1.11 per cent higher at Rs 50,800 per 10 gram. While silver March futures were ruling at Rs 69,520 per kg, up Rs 1,397 or 2.05 per cent. In the previous year, gold prices in India rallied 28.23 per cent in rupee terms. According to an analyst, the gold and silver rally is expected to continue this year albeit at a slower pace. “We need gold to trade above $1920 to really confirm that it’s reigniting its upward trend,” Bhavik Patel, Senior Technical Research Analyst, Tradebulls Securities, told Financial Express Online.
Patel said that the setback for gold prices came in 2020 when investors stopped buying gold as vaccines were deployed against the virus, encouraging investment in assets that perform well during periods of economic growth. “We expect gold to trade in the range of 50200-51200 in MCX this week with a positive bias. Any correction around 50300 is an ideal opportunity to go long with a stop loss of 49800 and a target of 51200,” Patel said.
Globally, COVID-19 cases continued to surge following which British Prime Minister Boris Johnson indicated tougher lockdown restrictions. Japan is considering declaring a state of emergency for Tokyo and surrounding areas. Spot gold rose 0.8 per cent to $1,912.71 per ounce, while US gold futures climbed 1.1 per cent to $1,916.40.
Jigar Trivedi, Fundamental Research Analyst, Anand Rathi Shares and Stock Brokers said that the dollar has continued to slip lower after Friday’s short-covering. The US Federal Reserve will release the minutes from their latest policy meeting on Wednesday. “Amid uncertainty regarding economic recovery, the sentiment is likely to be bullish in bullion in January,” Trivedi said.
According to Bhavik Patel, gold fundamentals that still point in favour of gold are negative real returns on bonds, huge government debt and threats of inflation. “Perhaps year 2021 would see an emergence of inflation we may not have seen in the last decade,” Patel added. Analysts at ICICI direct Research expect gold prices to remain in the range of Rs 50000-59500 levels in the short-term.