Gold price can peak to ₹60,000 this year. Here’s when, say experts

Gold rates today witnessed some profit-booking in early morning deals but remained above the psychological ₹57,000 levels, which it climbed on Monday evening deals. Gold future contract for the month of April on Multi Commodity Exchange (MCX), gold price today opened lower at ₹57,483 per 10 gm levels and went on to hit intraday low of ₹57,424 levels within few minutes of market opening. In international spot market,

According to commodity market experts, gold has started to attract 'safe haven' appeal after the Silicon Valley Bank crisis, which has jeopardised return from other assets, especially from equities, mutual funds, treasuries, bonds and other assets. So, investors are fishing out money from other assets and infusing it in gold that is providing support to the yellow metal rally. They said that gold price is facing hurdle at $1,920 per ounce levels and it has now immediate support placed at $1,880 levels. Experts maintained that much depends upon the U?S Fed's FOMC meeting outcome. If they decided to leave the key interest rates unchanged, then another $100 to $150 rally in gold price can't be ruled out.

Silicon Valley Bank crisis

Speaking on gold price outlook, Anuj Gupta, Vice President — Research at IIFL Securities said, "After eruption of Silicon Valley Bank crisis, gold prices have rallied to the tune of $100 dollar in international spot market in last three days. So, some profit booking was expected at $1,910 to $1,920 per ounce levels. However, the yellow metal has immediate support now placed at $1,880 levels and we can witness strong bounce-back from that support levels as the banking crisis has further deepened in the US markets."

On why gold prices rallied $100 in less than a week, Amit Sajeja, Vice President — Research at Motilal Oswal said, "After the news break of Silicon Valley Bank collapse, US dollar rate came under sell off pressure as it was at three month high. Due to slump in US dollar, equities and other assets have come under pressure, which attracted safe haven appeal towards gold." He advised gold investors to remain vigilant about the US CPI data expected today.

US Fed rate hike in focus

However, Anuj Gupta of IIFL Securities said that overall bias for gold is positive till US Fed's FOMC outcome becomes public as SVB crisis is going to provide support to any dip in gold prices. The IIFL Securities expert maintained that chances are high that US Fed may leave interest rate unchanged and if that happens, we may see gold prices climbing to a new high breaking its current life time high of ₹58,847 per 10 gm.

"Above $1,920 levels, gold price is facing hurdles at $1,950 and on breaching this levels, yellow metal rates may go up to $20,000 levels in near term. If the US Fed decides to leave interest rate unchanged, then in that case US dollar rates would come further under pressure leading to sharp upside rally in gold prices. On MCX, such FOMC outcome is expected may witness gold price hitting a fresh high at around ₹60,000 per 10 gm in near term as US Fed interest rate would be a key trigger for gold prices and unchanged US Fed interest rate would mean at least $100 to $150 per ounce rally in the precious bullion," said Anuj Gupta.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.