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Gold price rises on new Covid variant concern. Should you buy now

28 Nov , 2021   By : Kanchan Joshi

Gold price rises on new Covid variant concern. Should you buy now

Gold price future on MCX (Multi Commodity Exchange) on Friday shot up Rs219 per 10 gm. The December expiry contract on Friday ended at Rs47,640 per 10 gm, logging around 0.50 per cent rise from its previous close. According to commodity market experts, this rise in yellow metal price is due to the new Covid variant concern that led to heavy selloff in the global equity markets. They said that outlook for the precious metal is already bullish as rising global inflation, dovish stance of the US Fed on interest rate hike and depreciating Indian National Rupee (INR) against the US Dollar (USD) are already supporting yellow metal shine. They expected sharp rise in the yellow metal price and advised gold investors to buy the precious metal for heavy gains in short term.

Expecting new coronavirus variant to push gold price rally further; Amit Sajeja, Vice President — Commodity Research at Motilal Oswal said, "Current rally in gold price can be attributed to the new Covid variant strain. This worked as catalyst for the yellow metal shine in recent days as rising global inflation and depreciating Indian rupee against the US dollar are already supporting gold price to surge northward." He said that we may see rupee going below up to Rs76 per dollar levels in next one and half months.

Amit Sajeja of Motilal Oswal said that gold price has strong support at $1760 per ounce and currently it is oscillating around $1780 to $1790 per ounce levels. So, risk reward ratio for gold is around 1:3, which is very attractive. One should buy gold at current levels for immediate short term target of $1880 per ounce. He said that in next two to three months, gold price in the international market may surge up to $1915 per ounce levels.

Echoing with Amit Sajeja's views; Anuj Gupta, Vice President — Commodity & Currency Trade at IIFL Securities said, "Triggers like global inflation, dovish stance of US Fed on interest rate hike and rising industrial demand are already there to support gold price rush. But, after the news break of Omicorn virus, gold price is expected to give sharp upside movement in short term. At MCX, one can buy gold at around Rs47,500 to Rs47,700 per 10 gm levels for the immediate short term target of Rs48,700 maintaining stop loss at Rs46,900 per 10 levels. In one month, we can see gold price touching Rs49,700 levels. Here the gold is facing some resistance as it has formed double top here but on breaching this resistance we may see gold price going up to Rs52,000 per 10 gm levels in next one quarter or say by end of this FY22." Anuj Gupta of IIFL Securities said that gold price in international market may go up to $ 2000 per ounce levels by end of FY22.

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