Gold to hit 19,500 mark fuelled by festivals
Lacklustre global stock markets and the festive mood in India may push gold prices to 19,500 level in the next few months.
"Gold prices tend to move up ahead of the Indian festive season and the global market scenario, which is in a lacklustre mood, could help the trend further. Gold may see the level of 19,000 to 19,500 per 10 grams in the next few months. Gold is a good bet to invest when the market are sideways and their is uncertainty," SMC Global vice president Rajesh Jain said.
The precious metal rallied to a high at Rs 18,790 per 10 grams on August 19 and is currently trading at 18,688 per 10 grams. "When markets tend to be volatile and directionless, investors move their investment in other places like gold, commodities and bonds," Jain added.
Prices pick up during the Indian festive season, which starts with Rakhi and is followed by Janmashtami and Diwali, due to a sudden spurt in demand. Analysts feel that wholesale gold demand will pick up as the domestic and international markets are trading in uncertain territory, which will cause investors to pool in their money in gold.
"Festivals are not the only driving force, the rupee against dollar movement will also impact gold prices. The Indian rupee is largely steady as mild gains in shares and broadly strong regional peers helped sentiment, but further gains will be capped amid sustained risk aversion globally," Angel Broking director Commodities and Currencies Naveen Mathur said.
In international markets, gold and the dollar are havens for risk-averse investors. Gold is the stronger of the two since it serves as an abode even for those who are wary of the risk of owning dollars.
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