NEW DELHI: As the Indian equity markets are losing steam after an 18-month long bull run, and inflation concerns grip the world, gold seems to have started getting investor’s attention, of late.
In India, gold prices this week inched up 3.6% to close at Rs 49,066 per 10 gm (MCX December gold future) even as benchmark equity indices — Nifty and Sensex — ended the week only 1.5% higher.
Experts feel positive momentum in gold prices may push the prices above Rs 50,000 level.
International gold prices also surged 3.96% in the current week to close at $1864.53 an ounce (Comex spot price) as US retail inflation last week rose 6.2%, the highest level in more than three decades.
This triggered a rally in gold because of the metal’s appeal as an inflation hedge.
Gold prices have remained choppy since the start of 2021 with prices peaking at $1951 an ounce in January and touching a low of $1684 in March.
They recovered from the low in March to breach $1900 level in early June to again fall to $1720 in August.
Ever since, Gold has been trying to regain its lost sheen.
The recent inflation fears have come as a boost for gold prices.
Bullion experts believe that gold might remain firm next week despite strengthening dollar playing spoilsport.
“Gold has stalled near June highs as support from increased demand as an inflation hedge and choppiness in equity markets is countered by persisting strength in US dollar,” says Ravindra Rao, VP- Head Commodity Research at Kotak Securities.
He, however, says that though gold has paused after sharp gains in the last few sessions, the momentum remains positive.
The fact that gold can break out when the US dollar is also strong suggests that it has the momentum to move higher, says Sriram Iyer, Senior Research Analyst at Reliance Securities.
He says if MCX Gold (December future) breaches the immediate hurdle at Rs 49,665 level, then it could push prices to Rs 50,315 levels.