Will gold shine its way to $2.5K?
LOW INTEREST RATES, HIGH COVID CASES AND U.S. STIMULUS TO INSPIRE RALLY
dubai — The price of gold is expected to trade in the range of $1,700 to $2,000 an ounce by the end of the year, but could rally to $2,500 over the following six months helped by low interest rates, high Covid-19 cases and the US stimulus package, analysts and industry executives say.
However, they say that if the yellow metal surpasses $2,000, then physical demand will dry up and further gains will be driven by investment demand.
The yellow metal is down by $46.20 an ounce, or 2.38 per cent, in the past 30 days, but is still up by $222, or 13.24 per cent, in the last six months. In the last 12 months, , it has g gained 27.24 p per
Gold prices are in a bullish mode and could hit $2,500 over the next six months because interest rates are very low Tawhid Abdullah, Chairman of the Dubai Gold and Jewellery Group
Gold is not going to remain stable definitely; there will be changes but we have to wait and watch what those changes will be during and after the November 3 US elections Chandu Siroya, owner of Siroya Jewellers and vice-chairman of DGJG
cent, or $406.5 an ounce. It closed at $1,899, down $8.97 or 0.47 per cent, on Friday. The commodity hit an alltime high of $2,070 in August.
“The outlook for gold is positive amid mounting economic concerns due to Covid-19 surges. An approval of a US relief package will be the trigger for its price’s upside. Accommodative central bank p policies and liquidity injections are broadly supporting the market. Physical demand is recovering ahead of the festive season, so we see the price of gold reaching $2,300 an ounce early next year,” said ANZ Bank analysts.
Tawhid Abdullah, chairman of the Dubai Gold and Jewellery Group, is also quite bullish about the yellow metal, ,p projecting j g it to trade between $1,800 and $2,500 over the next sixmonth period.
“We will see volatility during the US elections and gold can touch $2,000 by the end of this year. Prices are in a bullish mode and could hit $2,500 over the next six months because interest rates are very low.”
“When interest rates are low, there is a lot of investment in gold from ETFs [exchange traded funds] and they are the biggest buyers and drivers for the surge in prices,” Abdullah said, adding that lower interest also push individuals to shift more cash to gold.
Chandu Siroya, owner of Siroya Jewellers and vice-chairman of the Dubai Gold and Jewellery Group, said gold prices movement will hinge on the US elections results and how the economy moves because the metal is linked to the movements of the economy.
“Gold is not going to remain stable definitely, there will be changes but we have to wait and watch what those changes will be during after the November 3 elections.”
“I can definitely say that beyond $2,000, demand of physical gold almost dries up so it will be only investment demand. For gold to hit $2,300 an ounce, there are a lot of drastic changes that have to happen in the economic world. I believe we are going to see gold trading between $1,700 to $1,900 up to the year-end. Hopefully, we will see much stronger market after the elections because the uncertainty will be removed,” added Siroya.
On the local market, he said it is steady now as tourists return and the festive season is set to begin soon. “Jobs uncertainty is behind us. In fact, people who were laid off are being called back and people who were on leave are also being called back to resume. So there are positive signs for the economy.”