Chennai: Gold prices in the Indian market made new highs on Friday as the international rates were at six-year high levels. With positive triggers in place, gold is likely to keep up momentum towards $1,500 per ounce in the medium term.
In the Multi Commodity Exchange, August contract of gold touched a fresh high of Rs 35,409 per 10 gm while in the New Delhi market gold rose by Rs 280 to Rs 35,950. In the international market the yellow metal touched six-year high level of $1,452 per ounce as the dollar, which has an inverse co-relation with gold, weakened.
Gold has been moving up in the past couple of days after consolidating around $1,400 levels for some time. The upward trend was supported by the comments of the US Federal Reserve acknowledging that dollar was overvalued and in order to hedge the risk from lower global growth projections, dollar could undergo some correction, said Himanshu Gupta, Vice President and Head of Commodities and Curren-cies Research, Globe Capital.
Fed’s comments about pursuing a path supportive of the economy made the market speculate about 50 basis points rate cut this year. The dollar witnessed some weaknesses after the comments.
Apart from the US Federal Reserve, some of the Asian central banks also have started adopting an easier monetary policy. The central bank of South Korea went for a rate cut, first time after 2016. Philippines too is expected to go for a rate cut as the global growth forecast remains a concern.
Further, the tensions in the Middle East and the trade war concerns also are supporting gold prices.
Meanwhile, holdings of SPDR Gold Trust, the largest gold-backed excha-ge-traded fund, too moved up this week, indicating rising investor interest.
“We expect gold to move to $1,480 in the immediate short-term and then towards $1,500. This could see the domestic gold trading around Rs 35,700 and Rs 35,800, if the rupee remains at the current levels...gold is likely to move towards $16,00 and $17,00 in the first half of 2020,” said Gupta....