Gold extends gains, prices near 6-year high1 min read . Updated: 21 Jun 2019, 09:32 AM IST
- Gold prices in India also moved sharply higher today
- The Fed's signal of possible rate cuts has has boosted gold prices
Gold futures topped $1,400 an ounce for the first time since 2013, riding bullish momentum after major central banks projected more dovish stances this week and geopolitical tensions rose. Futures in New York climbed as much as 0.4% to $1,402.60 an ounce, the highest since September 2013. Bullion for immediate delivery rose as much as 0.8% to $1,398.94 an ounce, also the highest since September 2013, and traded at $1,397.97 in Singapore.
Back in India, gold futures on the Multi Commodity Exchange (MCX) today traded 1% higher at ₹34,400.
In global markets, gold is heading for its best week in three years as the Federal Reserve opened the door for US interest rates cuts, while central banks in Europe and Australia also signaled readiness to do more to support growth. Bids for havens came into play as investors weighed increased tensions between the US and Iran and the meeting of the presidents of US and China to discuss the trade conflict on the sidelines of the Group of 20 summit in Japan next week.
The recent “bullish gold fever" is justified, according to Citigroup Inc. analysts, who raised their forecast on prices. A combination of loose monetary policy, a weaker dollar, elevated geopolitical risks and peaking U.S. growth are fueling the optimistic outlook for the metal, they said.
Gold prices are also supported from buying by some global central banks. "The latest report by WGC showed that some central banks in Asia including China, India and Kazakhstan and from Europe such as Russia, Poland and Hungary have begun accumulating Gold, although in minimal quantity, and that is starting to reflect on prices," said domestic brokerage Motilal Oswal said in a note.
Analysts say that gold prices are expected to remain well supported in the near term. "Overall with the central banks love for gold on the rise, geopolitical uncertainty increasing and clouding of global recessionary environment, we believe that gold prices are likely to rally over the coming quarters. We continue to maintain a positive bias targeting $1435-1440 on the COMEX," the brokerage added.