Gold price outlook positive, despite rebound in US service sector, expert says

For those still buying gold with expectations of making a big profit even now, here is some good news. Gold price is not likely to lose its sheen in the near term amid a rebound in US service sector and indications of a revival in China`s economy, Senior Technical Analyst Anuj Gupta said. Exuding confidence over the yellow metal, the technical analyst said that gold will continue to trade positively. 
Gupta who is a Deputy Vice President, Commodity and Currency Research at Angel Broking said that though the markets have witnessed strong rallies, lately, the sentiments around the overall economic scenario are still down.

 Gupta said that the most recent report by International Monetary Fund (IMF) is an indicator of how things will be, till the year 2021. The outlook for the financial year 2020-21 and 2021-22 have already been lowered, he said.

He was responding to a question if the gold price has steadied for now.

Gold prices held steady near an eight-year high on Tuesday as investors weighed a spike in COVID-19 cases around the world against a survey showing a rebound in U.S. services industry activity and expectations of a revival in China`s economy, Reuters today reported.

Spot gold was almost unchanged at USD 1,783.67 per ounce by 0303 GMT, just USD 5.29 shy of a near eight-year high hit last week. US gold futures were also flat at USD 1,793.50 per ounce, the report said.  

The commodity analyst expects the international gold to test USD 1795 – USD 1800 by the end of this week. He was also bullish on the MCX Gold Futures, anticipating them to trade around Rs 49000 per 10 gram, by this time.

As for the intraday trade, Gupta said that Rs 48800 could be achieved. The August Gold futures were trading around Rs 48320 around 1:00 pm today, up by 0.23 per cent from the previous close on Monday.

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He, however, said that the weakness in dollar against the Indian rupee augurs well for the domestic industry and may keep prices in check in the immediate term.