Omicron scare: Will gold value breach lifetime excessive?

Omicron disaster: Gold value February future contract on MCX (Multi Commodity Exchange) on Friday shot up ₹524 per 10 gm and closed at ₹47,925 per 10 gm ranges, logging 1.11 per cent intraday achieve. This sharp rise within the yellow steel has fueled hypothesis about bullion re-emerging as buyers’ haven within the wake of Omicron virus concern. According to commodity market consultants, rising international inflation, rupee depreciation in opposition to the US greenback and industrial demand for gold and silver are already creating demand for gold and silver. So, the gold and silver value could additional scale northward if the Omicron virus instances proceed to rise additional for longer time frame.

Speaking on gold value outlook on Omicron virus concern; Amit Sajeja, Vice President — Commodity Research at Motilal Oswal mentioned, “There is a concern about the mutations in the Omicron virus and it needs further research to understand how much of an impact it can have. Gold price is likely to find support on dips due to this new uncertainty and a short covering move towards $1830 per ounce could be seen in next 3-4 weeks. However due to recent hawkish stance adopted by the US Fed, immediate upside too could be limited.” Amit Sajeja of Motilal Oswal mentioned that by finish of December 2021, gold value in spot market could go as much as $1835 per ounce ranges whereas on MCX, the yellow steel could go as much as ₹48,800 to ₹49,000 per 10 gm.”

The Motilal Oswal commodity consultants mentioned that gold has sturdy assist at $1760 per ounce ranges and presently it’s oscillating round $1775 per ounce ranges the place risk-reward ratio (1:3) in gold may be very excessive. He mentioned that in subsequent two to a few months, gold value in spot market could shine as much as $1,915 per ounce ranges. He anticipated extra rally in gold compared to silver as rupee can also be anticipated to depreciate additional in opposition to the US greenback.

On triggers for gold value rally; Ravi Singh, Head of Research & Vice President at ShareIndia mentioned, “Gold prices are currently in a choppy zone due to the ambiguous fundamentals post-spread of Omicron virus. The early tapering by Fed to control inflation is somehow riding the gold sentiments among the traders who are waiting for the WHO guidance on Omicron virus to have a better understanding of the severity. Technically, gold price is taking support at ₹47,000 to ₹46,800 levels and seems bullish for the target of ₹49,000 in immediate short-term. If the outbreak of Omicron virus widespread then high volatility and demand for safe haven may push gold to ₹52,500 per 10 gm levels.”

On how a lot influence Omicron virus may have on gold value; Abhishek Chauhan, Head of Commodity & Currency at Swastika Investmart mentioned, “Omicron virus has spread in so many countries and due to its increasing influence, the possibility of strengthening the safe-haven demand may increase. The cases of Omicron have also been found in India, as infected people had no previous travel history, due to which it is estimated that the speed of its spread is rapid. If the effect of the virus increases in the coming days, then it can support the price of gold. As of now, there are no more fatal consequences, but it is capable of slowing down the pace of the economy, due to which the demand for investment in precious metals may increase.”

However, Abhishek Chauhan mentioned that gold costs could stay underneath stress for some time as US Fed has indicated that asset shortages and rate of interest hikes could speed up sooner than anticipated to ease inflationary pressures. Meanwhile, US knowledge launched on Thursday confirmed 2,22,000 preliminary jobless claims have been filed all through the week, higher than anticipated. As shifting in opposition to gold, the greenback stays sturdy whereas US bond yields stay unstable.

“The current situation of the pandemic may support Gold prices while the effort of central banks’ to control rising inflation may keep the upside limited for gold. However, the technical chart shows that Gold prices may test ₹50,000 to ₹52,000 levels in a few months,” concluded Abhishek Chauhan of Swastika Investmart.

So, after the outbreak of Omicron virus, gold value is predicted to present sharp upside motion and it might go as much as ₹52,000 per 10 gm ranges in few months. But, whether or not it could be capable of break its lifetime excessive of ₹56,191 per 10 gm on MCX, a lot relies upon upon how Omicron virus pangs out in subsequent few weeks.

Disclaimer: The views and suggestions made above are these of particular person analysts or broking corporations, and never of Mint.

Subscribe to Mint Newsletters * Enter a legitimate electronic mail * Thank you for subscribing to our e-newsletter.

Never miss a narrative! Stay related and knowledgeable with Mint.
Download
our App Now!!