Gold prices today hit a fresh all-time high of Rs 50,021 per 10 grams, backed by positive trends in international rates, coupled with a weaker dollar. With today’s surge in the prices of yellow metal, Gold prices have climbed up 28 per cent on a year-to-date basis. Bucking the trend, silver September futures have hit a 7-year high of Rs 60,782 per kg on MCX. “The drivers pushing the gold and silver prices higher are loose monetary policy and low real yields,” Bhavik Patel, Senior Technical Research Analyst at Tradebulls Securities, told Financial Express Online. “EU leaders gave a massive stimulus package of 750 billion euro to deal with coronavirus economic fallout and the market is hoping for a $1 trillion rescue package from Republicans, less than $3.5 trillion proposed by Democrats,” he added.
From March lows of Rs 38,500 per 10 grams, MCX gold prices have rallied 30 per cent, while silver futures have zoomed a whopping 81 per cent from Rs 33,580 per kg, hit in March this year. Silver prices touched a record high of Rs 73,600 per kg in 2011. Analysts say that It’s a matter of time before MCX gold hits a magical Rs 50,000 per 10 grams as Comex gold is heading towards an all-time high of $1,912. “Soft Dollar, stimulus packages from the EU and the US have underpinned the yellow metal,” said Jigar Trivedi, Fundamental Research Analyst at Anand Rathi Shares and Stock Brokers. “The safe-haven investment demand further went up as US President Donald Trump has said the coronavirus situation could worsen before it gets under control,” he added.
Spot gold was trading at $1,857.86 per ounce, after hitting its highest since September 2011 at $1,865.35 earlier in the session. US gold futures rose 0.8 per cent to $1,858.20, said a Reuters report. Reflecting investor sentiments, SPDR Gold Trust ETF said its holdings rose 0.7% to 1,219.75 tonnes on Tuesday. International bullion prices edged higher in early morning deals on Wednesday morning.
Gold to hit Rs 55,000, silver Rs 75,000 by year-end
Analysts are upbeat on gold and silver prices going ahead. “We expect gold to touch Rs 52000-55000 by year-end while silver may test levels of Rs 72000-75000 by year-end,” said Bhavik Patel.
A US Federal meeting is scheduled for next week, which is a key trigger for the yellow metal prices. “Eyes will be on the Fed meeting next week. Having said that, the undertone is definitely positive for the bullions,” said Jigar Trivedi. He further added that the Gold/Silver ratio was around 117 in April 2020, meaning that silver was too in an oversold position. “Gold/Silver ratio today is at 82, the lowest since November 2019, meaning that silver is back in the game,” Trivedi added. Silver prices have moved up by 12 per cent on the MCX in just two sessions.
A host of factors are set to boost gold prices further. “The weakness in the dollar, dropping treasury yields and rising cases of the coronavirus in the US continued to rise and fiscal stimulus shores up economies, gold will further become strong,” said Ajay Kedia, Kedia Advisory, Mumbai.