The US Federal Open Market Committee (FOMC) is scheduled to hold its two-day meeting early next week. While the bullish sentiment is likely to continue temporarily, its sustainability will depend on the outcome of FOMC’s tapering decision.
Through this week, gold rose 3.21 per cent in London, trading at $1,383.05/oz on Friday. However, in India, the rise was low, owing to a substantial fall in spot premia. In rupee terms, gold rose only Rs 20/10g to close at Rs 30,785/10g in Zaveri Bazaar on Saturday. During the week, gold premia fell from $120/oz to $80-85/oz.
“Gold has made an impressive rebound this year, and this can be attributed to geo-political concerns and signals of weakening economic prospects in China. Traders, however, are sceptical about its sustainability. While $1,425/oz is achievable, the direction will be determined by the coming FOMC meeting next week,” said Gnanasekar Thiagarajan, director, Commtrendz Research.
In the London spot market, silver gained 2.22 per cent to close at $21.41/oz on Friday. In rupee terms, it ended at with a marginal gain of 0.68 per cent at Rs 48,100 a kg.
SPDR Gold Trust deposits saw additions. Amid uncertainties, investors in gold booked an additional 2.1 tonnes during the end of the week to raise SPDR Gold Trust holdings to 813.30 tonnes. “Some bullish sentiment is emerging to support gold’s upward march. But we aren’t much bullish on gold, at least for the short term,” said Naveen Mathur, associate director, Angel Broking.