Amid increased uncertainties in the equity markets due to the US-China trade war and volatile crude prices, investors may continue to prefer safe-haven gold, which has advanced 20 percent so far in 2019. Market analysts expect gold prices to stay on the upward trajectory for some time. The prices of gold moved up 20 percent since January 2019 to the date.
Gold rates hit a life-time high of Rs 39,885 level this year due to several global factors, including US Fed rate cut, geopolitical tensions and the US-China trade war, said Anuj Gupta, deputy vice-president, research (commodities and currencies), Angel Broking.
“We are expecting gold prices to stabilise in 2020 on the expectation of easing of the trade war between the US and China and no expectation of further rate cut in interest rate by the US Fed. However, crude oil prices are increasing due to production cut by OPEC centuries. We are expecting gold price to move between 35,000 to 40,000 levels in 2020,” said Gupta.
Since 2016, gold has given good returns to investors. Gold yielded 10.08 percent, 6.23 percent, and 7.67 percent returns in 2016, 2017, and 2018, respectively.
Amit Sajeja, analyst, Motilal Oswal, said that the current support level at Rs Rs 36,000 is strong and the prices may rally to up to Rs 40,000 in the next three-four months.
Sajeja said, “There are still plenty of uncertainties from the global economic perspective. Even if Brexit is sorted out, the trade war is still on. Besides that, global manufacturing is at six-seven year lows even in developed economies like the US, Germany and the UK. Also, economic growth as indicated by GDP is slowing down. This will keep gold supported at lower levels. Besides Central Bank buying of gold has increased in the last few years. As far as levels are concerned, $1,440 -1,420 zone is an important support area and I don't expect spot gold to fall below that.”
“We can expect prices to rally again towards $1,560 in the next three-four months. In the domestic market, Rs 36,000 is strong support and price has potential to rally till Rs 40,000 in the next three-four months. Current price is around Rs 37500 per 10gm for 995 gold purity,” he said
Sanjeev Das, a consultant trainer and technical analyst at BSE Institute Ltd, New Delhi, was of the opinion that trend was bearish for gold. He said that the spot gold was trading in the range between $1,445 and $1,485. If it falls below $1,445 level then the next support level will be at $1,375.
First Published: IST