Gold price in India on Friday (May 22, 2020) climbed higher tracking global rates. Gold futures for June delivery trade firm at Rs. 46,492, up 0.22% or Rs. 104, while it made an early high of Rs. 46,518 per 10 gm.
In global markets, gold edged higher in price as escalating tensions between the US and China weighed, boosting safe-haven appeal of gold. Spot gold climbed 0.1% to $1,727.43 per ounce by 0029 GMT. US gold futures rose 0.3% to $1,727.00.
On the back of strength in the rupee against the dollar and as traders preferred to book profits amid hopes of swift recovery from the coronavirus-led economic slump, gold prices declined in the Mumbai bullion market on Thursday (May 21, 2020) by Rs. 274 to Rs. 46,986 per 10 gm.
In the international market, gold prices eased to 1-week low having fallen by over 1% as equities gained momentum on hopes of recovery in economic growth. Although losses in the precious yellow metal were capped due to the flare up in US-China tensions as well as optimism around further stimulus measures by central banks.
Factors to govern price of gold in the near-term
1. Traders will watch out for PMI or Purchasing Managers' Index data from leading economies. Any weakness on the front compared to what has been estimated will provide support to gold prices.
2. Also, the European Union and UK have reported inflation numbers which have come in at their lowest levels in close to four years. This could indeed foster central banks to unveil more of stimulus packages which bode well for gold.
Outlook for Gold Price
The brokerage firm Motilal Oswal is of the view that gold will trade with a negative bias with resistance at Rs 47,000 and intermediate resistance at Rs 46,800 levels.
Nonetheless, Kotak Securities' Ravindra Rao, VP-Head Commodity Research maintains a bullish view on the precious yellow metal. And said that till the time $1700 per ounce is held on to, general bias remains on the upside in gold. "Gold may witness mixed trade as global risk factors and hopes of stimulus measures may continue to support while steady equity markets may limit upside."