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    Gold prices may touch Rs 53,000 per 10 grams in 2020, says analyst

    Gold prices may touch Rs 53,000 per 10 grams in 2020, says analyst

    Gold prices may touch Rs 53,000 per 10 grams in 2020, says analyst
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    By Ankit Gohel   IST (Published)

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    “The fundamentals for gold prices are supportive. The investment demand for the yellow metal is high as the global economy is heading towards recession resulting in a slump in equity markets, thus supporting the safe-haven appeal of the metal,” said Ajay Kedia, Director, Kedia Commodities.

    Gold prices in India can touch Rs 53,000 per 10 grams level in this calendar year led by positive fundamentals amid fears of economic fallout from the coronavirus pandemic, analysts said.
    “The fundamentals for gold prices are supportive. The investment demand for the yellow metal is high as the global economy is heading towards recession resulting in a slump in equity markets, thus supporting the safe-haven appeal of the metal,” said Ajay Kedia, Director, Kedia Commodities.
    Interest rate cut by most of the central banks in the world along with monetary stimulus measures has pumped heavy liquidity in the markets and economy. Easy money in the markets is always positive for the yellow metal.
    On Wednesday, gold prices on MCX rose above Rs 46,700 levels, following gains in the international gold prices that were trading near seven-year high hit in the previous session. The upside in the prices is expected to continue, experts said.
    "Safe heaven demand and weakness in Dollar support gold prices. Although the lockdown situation also increased the demand for investment in the safe-haven asset class product. Low interest rate and global growth forecast cut down by IMF provide extra fuel to Gold prices," said Anuj Gupta, DVP–Commodities & Currencies Research, Angel Broking.
    Further, a gloomy picture of the global economic growth also drives a safe-haven demand for the yellow metal. The International Monetary Fund has predicted that the global economy may shrink by 3 percent in 2020 due to the virus outbreak, in the worst downturn since the Great Depression of the 1930s.
    Meanwhile, buying in gold exchange-traded funds (ETF) has started. Investors infused over Rs 1,600 crore in gold ETFs in 2019-20, after pulling out money for the last six financial years, as the coronavirus outbreak spurred safe-haven buying.
    The inflows meant asset under management (AUM) of gold funds surged by 79 percent to Rs 7,949 crore at the end of March 2020, from Rs 4,447 crore in March-end 2019, data from the Association of Mutual Funds in India (Amfi) showed.
    Technicals also suggest an upside in gold prices going ahead. “Gold above $1,700 look firm as Inverted Head & Shoulder pattern is formed,” Kedia added. This signals a bull market.
    All these factors as supportive of gold and the prices may rise to Rs 53,000 per 10 grams on MCX in the year 2020, Kedia added.
    Angel Broking expects the rally in gold prices may continue and it may test Rs 49,000 to Rs 50,000 on MCX and in the international market, it may test $1,780 to $1,800 soon.
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