Gold likely to reclaim ₹30,000 as equities, currencies take a hit
Chennai-India (JAN 27) Gold prices in the domestic spot and futures market are likely to rise towards ₹30,000 per 10 gm, following a rally in the global market. The yellow metal’s prices have increased to a two-month high on fall in equities, mainly in developing markets, and depreciating currencies such as the Argentinean peso.
Gold as a safe haven
The fall in equities and currencies is driving investors to haven assets such as gold. A slowdown in the Chinese manufacturing sector is also driving gold prices higher.
Gold could be influenced further by other developments this week, particularly the US Fed Reserve Open Market Committee meeting. Any decision by the Fed to pare its stimulus programme further to buoy the economy could drag the precious metal.
The other factor is resistance to high prices, especially in Asia. Already in early trade on Monday, gold pared its gains marginally dropping below $1,275 after having risen to $1,277.
In the domestic market, currency movement could be a factor since any drop in the rupee against the dollar makes import of gold, crude oil and vegetable oils costlier.
Spot gold, gold futures
By mid-day, spot gold ruled at $1,273.78 an ounce. Gold futures for February delivery quoted at $1,273.60. On NCDEX, spot gold had ended higher at ₹29,810 during the week-end.
MCX and NCDEX gold February contracts could top ₹29,500.
