Experts are of the view that the situation in West Asia will keep gold prices high and investors should use any dips to buy into the precious metal for a target of Rs 41,200.
India gold futures for February hit a fresh high of above Rs 41,000 on January 6 morning, tracking gains in the international spot market that was close to a seven-year high as US-Iran spurred safe-haven appetite.
“Gold soared to its highest in nearly seven years on Monday, as intensifying tensions in the Middle East drove investors towards the safe-haven metal, while palladium surpassed $2,000-level to hit a record high,” a Reuters report said.
Spot gold rose 1.4 percent to $1,573.14 per ounce. It has rallied 1.8 percent and touched its highest since April 10, 2013, at $1,579.55 earlier in the session, the report said.
On the MCX, gold contracts for February were trading higher by Rs 955, or 2.3 percent, at Rs 41,067 per 10 gram at 0920 hours. It hit a record high of 41,073 per 10 gm in the opening trade.
Experts are of the view that rising geopolitical concerns are likely to keep the momentum going in gold and investors should use any dips to buy into the precious metal for a target of Rs 41,200.
Gold prices gained around 2 percent on January 3 after a US airstrike on Baghdad killed a top Iranian commander in the attack that triggered safe-haven buying in precious metals.
“Iran’s hint to retaliate on the US and downbeat US ISM manufacturing PMI data also support bullion prices. In the domestic market, weakness in the rupee added more gains in precious metals,” Manoj Kumar Jain, Director, IndiaNivesh Commodities, told Moneycontrol.
“Due to mounting tensions in the Middle East and Iran’s threat for retaliation we expect both the precious metals remain firm. Gold could extend rally towards $1,584-1,600, Rs 41,500/42,000 in a few trading sessions. Silver could also extend rally towards $18.80-19 per troy ounce, Rs 49,500-51,200 in few trading sessions,” he said.
Kumar further added that we have already updated in our previous note on Friday every dip is an opportunity to buy and avoid short sell in precious metals. Till the time tensions persist in the Middle East both the precious metals remain trade firm.
The safe-haven Japanese yen hit a three-month high on January 6, while gold soared as increasing tensions between Iran and the United States sent investors scurrying to less risky assets.
On the daily chart, gold traded strongly positive on the back of brewing the US vs Iraq-Iran tensions, as retaliation from Iran is keeping the market nervous.
Overall, prices are in a strong positive trend market bias. Prices can be in the bullish momentum till the time they are above Rs 39,500 on a closing basis. For the day, Rs 40,900-41,200 will act as resistance whereas Rs 40,650-40,400 as supports.Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.