Chennai: Gold price in the Indian futures market gained Rs 340 per 10 gm to touch four-month high level on Friday as the international rates firmed up, moving $13 in a day to the yearly high of $1,355 per ounce.
From Thursday's close of $1,342 per ounce, gold prices moved up to $1,355 during Friday's session in the international market. This saw MCX gold gaining Rs 340 from the previous close of Rs 32,959 per 10 gm to Rs 33,300.
In the Delhi spot market, gold prices rose by Rs 300 to Rs 33,870 per 10 gram and silver surged by Rs 550 to Rs 38,400 per kg.
Gold prices have been firming up for the past few weeks. Tensions on the trade front had triggered a sharp upward movement in gold prices since mid May. From $1,270 an ounce around mid-May, prices have rallied more than $80 an ounce to touch $1,355 during the intraday trade on Friday.
"The US' trade war with China has intensified, though that with Mexico seems to have been resolved. Trade war is no longer a bilateral issue as the US and India are also into duty hikes and retaliatory hikes. Several international organisations have indicated a lower global growth for FY20,' said Himanshu Gupta, Vice President and Head of Commodities and Currencies Research, Globe Capital. The trade also has started bothering the earnings of the US companies, which can pull down growth in that country.
"The recent rally in gold at Comex has been due to the continued trade tension between the US and China who are unable to come on any settlement with regards to trade tariffs. Hence it is continually seen that bulls are favouring bullion. Another trigger is Fed's upcoming policy on 18th June which is expected to cut rates and maintain a dovish stance going forward,' said Jateen Trivedi, Technical Re-search Analyst at Bonanza Portfolio.
According to Gupta, speculations about the dovish stance of the Fed also have been affecting the dollar, which has seen some weakness in the recent sessions. Gold has gained from its inverse co-relation with dollar.
Further, the slowdown in the US labour market also has been supporting gold. The unemployment data has risen in the past three weeks. The US treasury yields also have been sliding, driving investors to safer havens.
Gold can touch the 2018 high of $1,365 without much delay. Subsequent resistance levels of $1,380 and $1,420 are achievable in the second quarter itself, said Gupta.
'Gold may test levels of $1,425-1,450 in Comex and 34,000-34,500 in MCX in a month or two and by year-end 1,550-1,600 in Comex and 35,500-36,000 in MCX,' added Trivedi.
