Analysts are going bullish on gold prices in the near term as the yellow metal rallies on the back of rising crude oil prices.
Gold’s June contract on MCX touched a high of Rupees 12,852/10gms ($298.6/10gms) on Tuesday after it opened at Rupees 12,816/10gms. “We see prices at $850-$900/oz for gold in 2008. The sentiment in both markets, silver and gold, is definitely bullish currently with both metals benefiting from weakening dollar and rising oil,” said Manqoba Madinane, commodity analyst from Standard Bank Global Markets Research. Mumbai spot gold prices closed flat at Rupees 12,800/10gms on 26 May while silver spot prices closed at Rupees 24,955/kg ($581.565/kg). The US and London markets remained closed on Monday.
Analysts expect the investment to increase via ETF’s and other instruments into commodities. “US stagflation concerns should drive greater investor interest in the commodity complex as investors seek to protect portfolios against escalating inflation expectations,” Madinane added. Analysts also expressed concerns over Indian market’s price-sensitivity which may result in a pull-back in gold demand, possibly having a negative impact on gold prices. (JCK, India)