CHENNAI: There is a high probability of gold prices testing the $2020 level and breaking through it, according to Emkay Wealth Management. This may take gold prices to Rs 60,800 per 10 gm in the Indian market.
The development in the US economy is the key factor providing further cues for the yellow metal. Currently, $1930 and $1960 are the support level and on the upper end there is a high probability of gold prices testing the $2020 level and breaking through it, Emkay said.
Initially, the uncertainties surrounding the growth prospects of the global economy had given support to gold prices. The tight money polices pursued by the central banks are expected to pull down the rate of economic growth in most economies, and with a slowdown enveloping the larger economies gold attains the spotlight as safe haven and also as something that retains value even in uncertain times. While gold is expected to hold well at the support levels, much would depend on the fortunes of the US economy.
Gold prices, like other commodity prices, tend to move up as the US dollar depreciates. Therefore, in times of dollar depreciation, the probability of gold prices rising is quite high. Technically, any rise in the index is capped at 103.90 and 106.30 for the time being.
The institutional and central bank interest in gold is a factor that has lent strength to the metal in the last two years. In 2022, central banks bought a record 1,136 tons of gold, valued at US$70 billion.
Gold ETFs also have witnessed inflows in the last three months, that is March-May, 2023.
“If gold prices move towards $2020 per ounce in the international market, at the current dollar rate, gold prices are likely to go up to Rs 60,800 per 10 gm,” said Ajay Kedia, MD, Kedia Commodities.
