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Gold Prices See Correction Even As Global Rates Climb Above $1800/oz

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Gold prices in India on July 14, 2020 ( Tuesday) declined by 0.46% or Rs. 226 to Rs. 48922 per 10 gm. There are reports that suggest that rupee can climb here from current levels of 75.19 per US dollar. This can be one reason for the drag on gold price.

Silver also saw a drag to levels below Rs. 53000 per kg in line with decline in gold rates.

 

In the international markets, gold prices on rising corona cases globally spiked above levels of $1800 per ounce. In line gold prices in the Indian markets hold on to levels of Rs. 49324 per 10 gm in bullion market as dollar softened against the rupee.

On the global front, over 12 million have been infected and there have been over 5 lakh death due to Covid 19.

Gold Prices See Correction Even As Global Rates Climb Above $1800/oz

No Phase II deal between the US and China

Also, bullion gained as Donald Trump on July 10 announced that there shall be no phase II deal between the US and China anytime soon.

China announced Corresponding Sanctions

On Monday China announced corresponding sanctions" against the United States on Monday after Washington imposed a penalty senior Chinese officials over the treatment of minority Uighur Muslims in Xinjiang.

Drag In Dollar Also Lent Support To Gold Prices

Dollar has been losing sheen as there is threat to economic revival given the corona showing no signs of receding. In fact the WHO proclaims that worst is yet to come.

Outlook for gold prices - Short Term Correction Cannot Be Ruled Out In Gold

Ravindra Rao, VP-Head Commodity Research at Kotak Securities, there seems to be a base forming near $1,790-1,800/oz levels as buying is emerging at those levels.

The gold-to-silver ratio currently stands at 95.25 to 1, which means the amount of silver required to buy one ounce of gold.

 

"Of course, there's going to be normal downside corrections, but the trend remains up", Kitco Metals senior analyst Jim Wyckoff said.

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