Performance of Gold in Q1FY21 by Rahul Gupta, Emkay Global Financial Services

In Q1 of FY21, the Spot Gold prices posted gains, rallying almost 13% and a multi-year high of 1779.06 in June, Rahul Gupta said.

Jul 01, 2020 08:07 IST India Infoline News Service

“During unprecedented times, traders prefer to take shelter of safe-haven assets like gold and it is generally considered as a traditional hedge. The fears of rapid coronavirus and its impact on global growth and rising geopolitical tensions between India-China, US-China and US-European Union has increased the demand for gold. Moreover, the rise in crude oil prices and hike in gold ETFs holdings provided support to the gold price. As countries around the world are easing the lockdown and governments and central banks are providing stimulus to support economies, there has been a cap to the gold rally.

In Q1 of FY21, the Spot Gold prices posted gains, rallying almost 13% and multi-year high of 1779.06 in June. Taking cues from firmness in international markets, MCX Gold also witness gains of almost 12 percent in Q1 FY21 and hit its life-time high of Rs.48589/10 gms in June.

Going ahead, any escalation in the ongoing geopolitical tensions or any negative news regarding coronavirus will boost safe-haven demand for gold and once it cross and sustains above 48600 we can expect a surge towards 49750-50600. Meanwhile, dips will find buying support until 47000 holds and prices will again bounce back towards 48600 levels.”

The author of this article is Mr. Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services

The views and opinions expressed are not of IIFL Securities, indiainfoline.com

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