Gold and silver prices are likely to remain volatile this week on the back of fears over the eurozone economic crisis and uncertainty in the Asian economy.
Analysts forecast gold prices to trade between $1,510-1,540 an ounce or Rs 15,200-15,700 per 10 gram. Silver prices are expected to move in a close range.
“Gold price is expected to touch a low of $1,510 this week, as the yellow metal has already touched the near month support. Underlying medium-term fundamentals, however, continue to remain supportive. Hence, this low base is unlikely to sustain for long,” said Gnanasekar Thiagarajan, director of Commtrendz Research, a Mumbai-based commodity broking firm.
Both metals declined around one per cent last week on profit booking by stockiest amid uncertainty in the global economy. Standard gold price, which was Rs 22,505 on last Monday, slipped to Rs 22,355 by Saturday. Similarly, silver price in the Zaveri Bazar here fell from Rs 55,595 per kg to Rs 55,010.
Analysts attributed the fall in prices to global trend. In London, gold price fell marginally from $1,544.65 an oz to $1,531.65 during the week. Silver price declined to $36.79 an oz to $36.19.
Last week, near month gold contract opened at Rs 22,670 per 10 gram on the Multi Commodity Exchange. Initially, it moved sharply higher, but found good resistance at Rs 22,786 per 10 gm level. Later, prices fell sharply towards Rs 22,455 and finally settled at Rs 22,545, a loss of Rs 107, compared to the previous week’s close of Rs 22,652.
Similarly, near month silver contract started with Rs 54,888 per kg on Monday and moved initially lower. But found support at Rs 54,228 per kg level. Later, prices moved sharply higher towards Rs 56,280 level, but could not sustain, corrected back towards Rs 54,301 and finally closed the week at Rs 54,447, with a marginal gain of Rs 44, compared to the previous week’s close of Rs 54,403.
Every correction in these precious metals will provide an opportunity for buyers to book afresh, as the economic condition in Europe continues to remain standstill, according to Naveen Mathur, associate director - commodities and currencies, Angel Broking.
Although, indications favour a recovery in the US economy, Asian countries, led by India and China, have hinted a slowdown. Gold, used as a safe haven investment avenue against global economic weakness, was therefore, set to accentuate, Mathur added. He said gold price would rise by Rs 250 to Rs 22,750.
