Gold after a disappointing June seems to look at a promising July. In fact the investment in Yellow metal is expected to sizzle in the coming days.
The price of the yellow metal has suddenly started witnessing a bump. In just two days, the price of ten grams of gold is up by Rs 700 across Indian retail markets.
According to data tracked by Sify.com average Gold prices across India touched nearly a month's high of Rs 48,280 for the purer 999 quality bullion. Ornamental or 916 quality Gold was also at a high of Rs 46,050. Sify tracks data from 70 plus markets.
The movement in retail rates comes from the bump in international markets -- Spot Gold traded to a month's high of $1,841 per ounce on Wednesday before trading in a range of 1,826 - 1,834.
Even the LBMA fix effective for Thursday was $30 higher than the lowest fix in the last seven days. Gold rates have crashed systemically from 16th June when LBMA fix was reported at $1,860. On 17th June, the fix was reported at $1,778.70 -- a whopping $82.50 crash in 24 hrs.
It seems that the outlook on Gold is improving and there is a likelihood of Gold soon recovering the loss it made in June.
The reason for Gold rates to appreciate this week largely factors the speech from US Federal Chief Jerome Powell. Of course optimism on Treasury Yields and a positive movement on the US Dollar ahead of his speech did inflict major blows on short-term gains for Gold.
On Wednesday Powell highlighted that there was no rush in raising interest rates. This, despite soaring inflation across product categories as evidenced by latest inflation data projections. Also, there is likelihood that the US Fed may keep interest rates pinned to near zero until 2023.
The Governor's comments dented the US Dollar index and managed to mute US treasury yields.
The dip in currency yields has boosted confidence on Gold. In fact traders believe in the likelihood of Gold touching $2,000 by the end of 2021.
A recent report also predicts that there could be a dip in Gold prices which could open into a great buying opportunity for bullion investors.
In its latest Bullion report, CapitalVia Global Research's analyst Kshitij Purohit authors of the window of buying for Gold investors.
The report says that Spot Gold may notice a bullish breakout followed by a marginal decline and then a rally. For those keen on buying, the report reads, "On the domestic front, MCX Gold August opened on a flat note and is trading with positive bias. Prices have rallied more than 500 points in the previous two sessions. We may expect a decline during the evening hours (15th July) where 48300 levels could be tested. This dip could act as buying opportunity for the investors."
Even as Gold looks set in sailing to a month's high, the markets would be watchful of the unemployment data and low currency yields.
Since gold rates tracks international spot and the MCX Gold movements this window could be a fruitful opportunity for those who either want to buy a few grams of Gold for an auspicious occassion during the year.
Otherwise, should gold continue the short-rally witnessed in the last two days it could very well breach the $2,000 level which means bullion selling at Rs 52,500 to Rs 53,675 (1$ = 74.53).
Disclaimer: The article is informative in nature and should not be construed as an investment offer. Readers are advised to seek professional guidance from a SEBI registered financial analyst for personalized advice.