On July 20, gold fell in the Asian session tracking the silent global cues. Based on the MCX market, August gold futures lost 0.12% which is the third decline in four days. Silver also edged lower with the futures on MCX declining by 0.25%. Earlier this month, the gold prices had hit a record high but since then the price remained choppy.
However, gold prices in the global markets remained steady above the key psychological level of $1,800 per ounce. The US gold futures were almost unchanged at $1,809 while the spot gold was steady at $1,808.53 per ounce. It was supported by a weaker US dollar and concerns over the increasing COVID-19 cases throughout the world.
Among most of the other precious metals, platinum dropped 0.2% to $836.62 and silver moved 0.1% higher to reach $19.33. Kotak Securities said in a note:
“Gold may witness choppy trade as market players assess virus situation as well as geopolitical issues however general bias may be on the upside amid increasing challenges to the global economy.”
Jigar Trivedi, Research Analyst- Commodities Fundamental, Anand Rathi Shares & Stock Brokers:
“A rise in the US-China tensions and an uptick in the investment demand has underpinned the yellow metal. Going ahead, the bull’s case is intact for gold but, since the price is too high, buy on dips would be the best strategy for traders.”
Turning to the physical side, the demand for gold remained silent in India amid the surging COVID-19 cases in the country. In the Indian market, dealers charged significant premiums of around $2 an ounce over the official domestic prices that were registered last week compared to the previous week’s $3 premium according to Reuters. That happened amid a big fall in the imports.
Gold imports in India dropped by 94% during the first quarter of 2020-21 due to a considerable fall in demand in the aftermath of the COVID-19 pandemic. Currently, India is the biggest importer of gold to cater to the demand of the jewelry industry. The Citigroup analysts said:
“Nominal gold prices have already posted fresh records in every other G-10 and major emerging market currency this year. It is only a matter of time for fresh highs in U.S. dollars.”
This year, gold has gained 19% to reach its highest level in nine years in the global markets as the health crisis pushed investors towards the haven assets. Gold might climb to an all-time high in six to nine months. There is also a 30% likelihood that it will surpass $2,000 in the next three to five months.