Gold touches new high of Rs 53,526; likely to increase further

Gold price went record high on Thursday after it went past Rs 53,500 per 10 gm. At the Multi commodity Exchange (MCX), August gold future was being traded at Rs 53526.00 per 10 gram. 

Commodity experts credit the rise to the collapse of the dollar by nearly 5.5 per cent in the last ten forex trade sessions and rising tension between the US and China. 

It is predicted that the yellow metal will continue going up and in the next one month, we can expect it to hit Rs 54,000 per 10 gm at the MCX. In the international markets, experts say that gold is likely to reach $2,000 per ounce.

Explaining the reason behind the rise, Amit Sajeja, Associate Vice President at Motilal Oswal said, "Gold price has been rising due to two major reasons — US dollar collapsing to the tune of 5.5 per cent in the last ten forex trade sessions and US bond yields almost close to negative territory." 

Sajeja added that dollar price crash is a combination of weak US economy and rising US-China tension. 

The global economy is badly hit in the wake of the US and its allies cornering China in global merchandise and China's subsequent response to it. Coronavirus pandemic has further added to the economic troubles.

"Due to the traditional investment tools not yielding high returns, global investors have moved towards gold that has made it an investors haven. This is expected to continue and so does the gold price rally," said Sajeja.

On the other hand, multiple factors are responsible for rising prices. Highlighting these reasons, Anuj Gupta, Deputy Vice President — Commodities and Currencies Research at Angel Broking said, "Today gold again made a new life time high of Rs 53,526 levels. Weakness in dollar due to new government data underscored the US GDP and deep economy due to coronavirus and the US president raised the possibility of delaying the November Election. US GDP collapsed 32.9 per cent during the second quarter and job loss claims rose last week. So, we expect the Gold trend to remain positive. Traders can buy gold around Rs 52800 to 52900 levels with the stop loss of Rs 52200 and for the target of Rs 53,800 levels. We also expect gold may test $2000 level soon."