Chennai: Gold prices touched five-year high in the international market on Thursday, while in the Indian spot market the yellow metal crossed Rs 34,000 level as the US Fed Reserve signaled interest rate cuts for this year.
On Thursday, gold gained $47 during the intraday to touch $1395 per ounce, a five-year high level. In the Indian spot market gold moved up Rs 280 to Rs 34,020 per 10 gm, while silver gained Rs 710 per kg towards Rs 39,060. In the Multi Commodity Excha-nge, prices rallied to Rs 33800 from the previous close of Rs 33079.
Investors’ interest in gold surged after US Federal Reserve’s FOMC meeting, which took a dovish stance on the interest rates. It signaled the possibility of interest rate cut in the July meeting. “The market also speculates a second rate cut in September as the central bank weighed the economic risks amidst the trade war and lower inflation,’ said Himanshu Gupta, Vice President and Head of Commodities and Currencies Research, Globe Capital.
The US bond yields fell below 2 per cent and the dollar too weakened following the FOMC meet and supported the gold prices. “The fundamentals for gold are much stronger now compared to what it was earlier,” said Jateen Trivedi, Technical Research Analyst at Bonanza Portfolio.
Analysts expect gold to further move ahead on several positive triggers. According to Motilal Oswal, central bank buying, which is an indicator of the rising concerns over dollar, has acted as a trigger for the positive sentiments in the bullion market. “In the last one month we have seen a good run up in gold prices. It seems that in the phase of consolidation some major buying has taken place and one of the purchasers has been central banks, the brokerage said in a report....