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Gold prices are rising now, but with mixed expectations

Indian gold price range

In September, 22-carat gold prices in India closed at Rs. 44,494 / 10 grams while 24-carat gold prices closed at Rs. 45,490 / 10 grams, this range had a direct impact on the Indian gold price. In September 22-karat gold prices in India fell 4.08%, which was worrying for gold jewelers and traders. But in October gold prices saw a significant spike around the world. Concerns about inflation forced investors to seek shelter under the precious metal. In October the 22-carat gold price began at Rs. 45,470 / 10 grams on October 1st. With a sharp increase on October 30th, the 22-carat gold price will range at Rs. 47,050 / 10 grams. This month was a positive time for the gold market at the start of the Christmas season when Indians await Diwali and Dhanteras.

International gold price range

International gold price range

On the world markets, the gold price fell below $ 1700 / oz in September. Gold has now exceeded the psychological high of $ 1,800 / oz on the international futures markets and the spot market for several days at the end of October. However, gold prices recently fell slightly below this level. Friday, October 29th, was the last trading day of the month in the Comex December Gold Futures the price closed at USD 1,783.9 / oz with a decline of 1.04%. The gold price on the spot market also closed at 1785.1 USD / ounce with a decline of 0.83%. But even on that day, the price of gold eventually hit the $ 1802.4 / ounce level. So this month’s range was certainly far more positive than the range from September. According to analysts, the support price for gold for the next year is considered at $ 1600 / oz.

Gold price expectations

Gold price expectations

The price of gold in the international market is currently stuck at the level of $ 1,800 / oz, but expectations for the upcoming prices show a constellation of opinions.

Edward Moya, senior market analyst at OANDA, told Kitco News, “With the 10-year Treasury yield moving towards 1.60%, gold is on thin ice. The $ 1,700 mark appears imminent for gold bars as many traders keep an eye on the March lows of $ 1,670 as critical support. The resetting of inflation expectations did not help gold prices at all, in fact it was the main driver of government bond yields. However, Moya added, “If gold can show signs of stabilizing, then longer-term investors should come back and bet on the global economic recovery in 2022, which will ultimately result in a weaker dollar.” If gold prices worldwide drop below the $ 1700 / ounce level, Indian gold companies will suffer.

Motilal Oswal, on the other hand, expected the gold price to climb to Rs. 52000-53000 / 10 grams in India, over the next 12 months. This will only be possible if gold prices in the international markets reach around the $ 1900 / oz mark. So expectations for gold prices are now mixed.

US Federal Reserve meeting in November

US Federal Reserve meeting in November

Above all, the anticipation; the gold market is currently waiting for the statement from the US Federal Reserve in the first week of November after its monetary policy meeting. The US Federal Reserve is expected to begin throttling from December this year. Tapering reduces the flow of liquidity into the economy. And not only the US Federal Reserve, but also the central banks of European countries are trying to reduce the volume of liquidity injections as they are receiving signals of economic recovery. Gold prices can fall at this point as US Treasuries are better and more lucrative for investors. But the US isn’t going to hike rates anytime soon, which will be positive support for gold around the world.

“Hyperinflation”?

Finally, the most important factor behind the ups and downs in gold prices, inflation, should be thoroughly discussed in order to anticipate the gold price range. The only reason gold prices saw a correction in October is because of inflation. Temporary inflation was once expected in the US, but it is now referred to as “stagflation”. This means that inflation is currently stagnating. Recently, Jack Dorsey, CEO of Twitter, tweeted, “Hyperinflation is going to change everything. It’s happening.” However, if “hyperinflation” is probably not the right word, then consumer goods prices must rise at least 50% per month, or 12,874% per year.

Inflation currently

Inflation currently

Currently, US inflation is around 5.4%. Dorsey believes inflation can reach 15%. Be that as it may, if inflation continues or rises at this level, gold prices will surely rise again around the world, considering that the interest rate is not going up. However, if the US Federal Reserve raises interest rates to control inflation, gold prices could fall. Analysts are therefore patient at the moment and are waiting for the US Federal Reserve to address them in good time in order to anticipate the market. However, a falling gold rate will help Indian buyers consume more gold in the days to come. The World Gold Council also mentioned in a recent report that the demand for gold jewelry in India rose 60% in the third quarter. So that’s a positive tone for the gold business.

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