There have been mixed factors leading to high volatility in the precious yellow metal and after the latest Fed decision which vowed to maintain interest rates near zero for at least three years till 2023 and better prospects seen for the US recovery, there was at one end seen a rise in the US dollar, pushing up the risk-on sentiment among investors.
Gold Price Highly Choppy
But sooner the higher unemployment claims reversed the trend and brought again to fore the economic recovery concerns which sank the dollar again and pushed the yellow-metal higher.
Also, the stand of other major banks including the likes of European Central Bank and Bank of Japan to provide additional stimulus to help come over the crisis due to coronavirus further aided an in increase in the precious yellow metal price.
Gold price currently in the spot market
In the spot market in Mumbai gold surged to Rs. 51620 per gm on weaker dollar on Sept 18, 2020 but gains remained capped on account of appreciation in rupee. Nonetheless fresh triggers are awaited.
In the future market, gold on the MCX for October delivery gained 0.51% or Rs. 262 to Rs. 51715 per 10gm.
Gold to scale to Rs. 56000 per 10 gm in 2-3 months
Even as fresh trigger after Fed's decision are awaited, experts believe that gold prices in India will first correct to levels of Rs. 50000 per 10 gm and that shall be the perfect time to take position in the bullion.
And there is a forecast that it will run up to Rs. 56000 per 10 gm in 2-3 months time.
"Gold price rise today won't last long as weekend profit-booking may trigger any time and euro has also risen against the dollar. So, we may not see much buying right now and hence the yellow metal may fall to Rs 50,000 per 10 gm levels in the current fortnight. But that will be an ideal buying position and one can buy gold there for the target of Rs 56,000 per 10 gm in the next three months", said Associate Vice President at Motilal Oswal.
Anuj Gupta, Deputy Vice President - Commodities & Currency research at Angel Broking said, "Fed has maintained its dovish stance on the interest rates and at the same time it has maintained that the US economy will continue to face the COVID-19 hurdle. Apart from that, US Presidential elections are fast approaching and Donald Trump will try to address his voters by giving anti-China statement. All this hints at good support for gold price in the next three months. So, once gold reaches around Rs 50,500 per 10 gm, investors should start buying for the three month time horizon keeping at least Rs 55,000 per 10 gm in mind."