gold price sunk on friday 195 per 10 grams on the Multi Commodity Exchange (MCX) and closed at 48,864 per 10 grams while silver fell by 0.53 per cent to . closed on 65,620 per kg level. According to commodity experts, this fall in gold and silver prices is more profit-booking than anything else. He said last week gold had hit a nine-month high and hence profit-booking was expected. He advised investors to take this fall as a buying opportunity as the precious yellow metal is trading in a profit-booking range of $1830 to $1,850 an ounce in the international market.
According to commodity market experts, the triggers for gold price remain unchanged as Fed continues to maintain its stance on interest rate hike while global inflation and poor US data are still in place. He said that the December contract on MCX expires on December 3. Therefore, those who have positions in this December futures contract are exiting their built-up holdings. He advised gold investors to maintain ‘buy on dips’ strategy in both gold and silver as gold is expected to take a hit from 50,000 51,000 by the end of this year while silver may rise to 74,000 per kg by the end of 2021.
Speaking on gold price trigger; Anuj Gupta, Vice President, Commodity and Currency Trade, IIFL Securities said, “Gold and silver prices declined on profit-booking as US Fed’s soft stance on interest rate hike, rising global inflation, rising industrial growth in gold and silver.” There are triggers like demand. And bad US data is still there. In fact, the gold price in the international market is trading higher from $1830 to $1880 an ounce. Breaking the upper barrier of $1880 an ounce on a weekly closing basis. After this, the price of gold may look upwards. In that case, it can go to the level of $1960 to $1980 per ounce in the international market.”
Gold price expected to reverse trend; Manoj Dalmiya, Founder and Director, Proficient Equities Ltd. said, “Gold price has given a breakout at the level of $1835 an ounce and it is still above this level. coincides with the high value of the US, but also fits well with weather patterns, indicating that the months of December and January have traditionally been bullish for gold.”
Speaking on the reasons that could reverse the trend in gold and silver prices; Abhishek Chauhan, Head of Commodity & Currency, Swastika Investmart Ltd., said, “Global inflation is rising due to supply constraints across the globe, which is pushing up the prices of essential commodities including food grains, edible oils, metals and electricity supply. The bottleneck is there. Not expected to clear soon and it may take more than a year for everything to return to normal as it was during pre-pandemic levels. However, industrial consumption is also increasing which is accompanied by a rally in gold. Could give an edge to silver prices.
When asked about gold price target on MCX, Anuj Gupta of IIFL Securities said, “Gold has strong support. 47,900 level on MCX. Must buy gold around 48,500 level for short term target of 49,800 per 10 grams.” He added that the current gold futures contract on MCX is expiring on December 3 and people are closing their build-up holdings. This is also one of the reasons for the fall in gold price in the recent sessions. However, by the end of this year, we are expecting that the price of gold will hit from 50,000 51,000 per 10 grams while silver price is expected to hit from 72,000 74,000 per kg on MCX.”
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