Deccan Chronicle

Gold price likely to touch record high by November

- SANGEETHA G

Even if gold moves back to the record high levels of

$2,070, at the current rupee levels, gold in the domestic market may move past ` 56,000 per

10 gm towards ` 58,000 levels.

The uncertaint­y around US Presidenti­al elections may see gold making new highs, finds a report by Citigroup. A revisit of the record high levels in the internatio­nal market will see gold touching `56,000 in the Indian market.

Uncertaint­y over the contest and delays about the outcome may “be underappre­ciated by precious metals markets,” Citigroup said in a quarterly commoditie­s outlook. This could see gold moving up by more than $200 an ounce from the current levels to cross $2,070.

Gold had touched $2,070 in the first week of August. But the metal has been witnessing some correction with the movement of the dollar index.

The US elections in November would see incumbent Donald Trump pitting against Joe Biden.

The election “could be an extraordin­ary catalyst for gold flat price and volatility skew late in the fourth quarter, even though historical­ly there is no clear pattern for gold trading or price volatility into and after US elections,” Citi said. “That is one reason why we expect gold prices to hit fresh records before year-end,” it added.

According to Himanshu Gupta, vice-president and head of commoditie­s and currencies research, Globe Capital, gold went up during the last presidenti­al elections, but due to the lack of support from the macro fundamenta­ls, it fell later.

“However, this time, gold has the support of macro fundamenta­ls. Interest rates are low and are expected to remain lower until 2023. Despite the recent recovery in the dollar index, the greenback is in bearish territory. Further, the global economies are not going to recover any faster,” he said.

“Our medium term target is $2,250-$2,300 levels. Even if gold moves back to the record high levels of

$2,070, at the current rupee levels, gold in India may move past `56,000 per

10 gm towards `58,000 levels. Even our Diwali target is around those levels,” said Gupta.

Kedia Commoditie­s has set a 3-month target of

$2200 and a 6-12 month target of $2400 per ounce. “We lift the 2021 base case gold price forecast by $300 per ounce versus our early July forecast, to $2,275,” said Ajay Kedia, the MD of Kedia Commoditie­s.

HIMANSHU GUPTA, V-P, Globe Capital

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