Gold price vs dollar: Weak USD, geopolitical tension may make the yellow metal shine bright
According to the commodity market experts, Gold prices have strong support at around $1360-65 per ounce while its target by the end of 2019 is $1440 per ounce.
Gold prices are expected to continue shining in the global and domestic commodity market as the Federal Reserve has announced to cut interest rates by July onwards that led to the crash of US dollar (USD) at the Dollar Index. Apart from this, the rise in geopolitical tension, especially between the US and Iran and US-China trade stand-off that resurfaced again at the G-20 Summit worked as fuel to the gold rush at Comdex. According to the commodity market experts, the Gold prices have strong support at around $1360-65 per ounce while its target by the end of 2019 is $1440 per ounce. In MCX perspective, the gold futures prices are expected to touch around Rs 37,000 per 10 grams, say experts.
Speaking on the major indicator that is fuelling the gold future prices Amit Sajeje, Analyst at Motilal Oswal said, "Dovish stance of the Federal Reserve on the interest rate cut from July onwards is the major trigger that has led to the crash of the US dollar at the Dollar Index. It's more a dollar versus gold than anything else that is fuelling the gold future prices. Apart from that, other triggers like US-Iran tension, US-China trade standoff that was very much visible at the G-20 Summit are those that can work as an added premium for escalation of the gold versus dollar war. These geopolitical standoffs are not going to have its impact for long but the Fed rate cut would definitely have a long-term impact."
Standing in sync with Amit Sajeja's views Anuj Gupta, Deputy Vice President — Commodity and Currency Research at Angel Broking told Zee Business Online, "In the global commodity market, the US dollar has strong support at $1360-65 per ounce levels and by the end of this year, the gold futures prices are expected to show $1440 per ounce. In MCX perspective, the gold futures prices are expected to show Rs 36,000 per 10 grams and by the end of this year, the MCX gold price would be around Rs 37,000." Anuj Gupta of Angle Broking also agreed weak dollar is the major trigger in the gold rush at Comdex that any other indicators. However, he agreed that such triggers are expected to continue till the next US Presidential Elections next year as the incumbent Donald Tump is expected to toss such issues to fuel local sentiments.
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04:26 PM IST