 "Gold Coins")
Gold prices rose 3.4 per cent to hit the highest in almost two years at Zaveri Bazaar here on Thursday, after the US Federal Reserve issued a dovish economic outlook, raising the metal’s haven appeal globally.
Standard gold settled at Rs 28,835 per 10g on Thursday, not seen since May 17, 2014. As the price rose by Rs 945 per 10g, one of the sharpest gains in recent memory, physical buyers abstained from fresh purchase.
In London, gold gained about three per cent, to trade at $1,238 an oz in early afternoon trade. Silver followed, jumping 3.3 per cent to close at Rs 38,000 a kg, the highest since June 4, 2015.
“Along with the US Fed’s dovish economic outlook, a global selloff in equity markets raised gold’s appeal as safe haven buying. We expected the trend to continue for some time,” said Gnanasekar Thiagarajan, Director, Commtrendz Research.
Gold surged to its highest in a year in global markets on Thursday as investors bet the US Fed could find it hard to raise rates this year. Haven demand amid a tumble in equities and the dollar also boosted the metal. The Fed is unlikely to reverse its plan to raise interest rates further this year but tighter credit markets, volatile financial markets, and uncertainty over Chinese economic growth have raised risks to the US economy, Fed chief Janet Yellen said on Wednesday.
With the equity markets continueing in bears’ grip, gold has become a natural gainer. As a consequence, traders and technical analysts have revised gold’s next resistance at $1,310 an oz, surpassing the earlier one of $1,200 an oz on Thursday. Since the rupee also depreciated to 68.22 against the dollar on Thursday, the price in India might translate into Rs 31,000 per 10g by the end of the second quarter, said Thiagarajan.
"Once Chinese buyers enter into the market after February 14 from their New Year holiday, gold might see some correction,” said Kumar Jain, Director, Umedmal Tilokchand Zaveri.
