New Delhi, July 6 : The price of gold in the spot and futures markets remained soft for the fourth consecutive day on Monday, but during the corona period the fundamentals of the precious metal are strong due to which it may touch a new high later this year.
The demand for the yellow metal may not be much in the upcoming festive season due to the uncertainty caused by the corona crisis, but considering the investors interest in gold, its price is expected to cross the psychological level of Rs 52,000 per 10 grams by Diwali.
On July 1 last week, gold had risen to Rs 48,982 per 10 grams on the domestic futures market — Multi Commodity Exchange (MCX), which is the record level so far, while the price of gold in the domestic spot market has breached the Rs 50,000 per 10 gram mark.
At the same time in the international market, gold prices are being speculated to go up to $2,000 per ounce. Last week, on July 1, gold rose to $1807.70 per ounce, which is the highest level since September 21, 2011, when the price of gold was $1,812 per ounce, while gold on Comex was recorded at the record level of $1911.60 on September 6, 2011.
Ajay Kedia, director of Kedia Commodity, told IANS that all the fundamentals of gold are strong at the moment and the spot demand is also strong due to which the price of the yellow metal can breach the Rs 52,000 per 10 grams level on MCX till Diwali, while on Comex it can go up to $2,000 per ounce.
When asked about the reasons for the slowdown in the demand for gold in the last four days, Kedia said that the strength of the rupee in the domestic market has put pressure on the price of gold, while the price softening in the international market was triggered by good economic data in the United States, which indicates signs of recovery in economic activity affected due to the corona crisis. However, this is transient and gold will remain bullish in the long term.
Anuj Gupta, deputy vice president (energy and currency research), Angel Broking, said that gold has softened slightly due to the rebound in the stock market and recovery in the rupee, but investment in gold in an environment of uncertainty created by the outbreak of coronavirus will remain robust. He said that in times of crisis, the investor prefers a safe investment such as gold.
The traders of the bullion market also predict that gold will continue to rise this year.
India Bullion and Jewellers Association (IBJA) National Secretary Surendra Mehta told IANS that 24 carat gold price without GST would cross Rs 52,000 per 10 grams in the spot market by Diwali. However, at this level the price will not last long and will break soon. He said that the main reason for the rise in gold prices is the reduction in interest rates by the central banks worldwide during the corona period, due to which investors demand in gold is likely to stay.
However, Shanti Bhai Patel, president of the Gem and Jewellery Trade Council of India (GJTCI), expects a further rise in gold prices. He says that at the moment demand is more in gold than in jewellery, which is likely to continue.
Patel said gold reached close to Rs 51,000 per 10 grams last week, but it is not difficult for it to go up to the Rs 55,000 level due to increased demand during Diwali and Dhanteras. He however, added GST also to the price which is currently 3 per cent. He said in Ahmedabad, the price of 24 carat gold jumped to Rs 50,600 per 10 grams last week.
On MCX, August expiry futures gold was trading at Rs 48,000 per 10 grams at 1.42 p.m. on Monday, with a fall of Rs 46 from the previous close. At the same time, the silver September futures was trading at Rs 49,265 per kg with an increase of Rs 88 from the previous close.