Dollar pushes gold, silver up
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Sept. 23: The two precious metals — gold and silver, soared to new highs on Thursday. In foreign markets, gold may breach the $1,300 an ounce level in the next few days, say analysts tracking the precious metal. In the domestic market, gold prices for delivery in February shot up to `19,443 per 10 grams on the multi-commodity exchange. Silver price too shot up to a level of `32,950 a kg in the domestic markets.
Weakness in the US dollar, following recent comments made by the US Federal Reserve, are being seen as the reason for the price rise. “Investors get worried when they hear comments about additional stimulus,” said Mr Kunal Shah of Nirmal Bang. This is bad news for the currency because stimulus would mean more money being printed,” he said.
Apart from India and some emerging markets, most of the equity markets globally are not doing very well, says a commodities analyst.
This is also a reason for investors flocking to precious metals. Market watchers expect prices here to remain stable for some time.
“The next few weeks are likely to see a consolidation for gold prices, around the level of `19,300-19,330/10 grams,” said Mr Naveen Mathur of Angel Broking. Silver prices too, should remain stable, he added. Silver has done a little better than gold over the past few weeks.
Analysts say that silver, apart from being a precious metal, is also an industrial metal and does well when demand for base metals recovers. Unlike gold however, the options for investing in silver are limited.
For a retail investor, investing in silver would mean purchasing the metal in physical form or trading in exchange futures. In case of gold, there is also the option to invest via exchange traded futures (ETFs), which work similar to mutual funds.
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