For the last few days, gold prices saw a sudden decline. However, the price has revived today not just in the domestic market but at the international level as well. This rise in prices can be attributed to the easing of COVID-19-induced lockdown restrictions around the world. The metal's revival is also fed from optimism that the global economy could rebound quicker than previously anticipated.
While some jewellery shops in India have reopened, there is not much demand for gold at this time of the pandemic. This increase in gold prices will subdue the demand further at the retail level. According to IBJA's indicative retail selling rates for gold jewellry, the price of fine gold (999) stood at Rs 4, 676 per gram and 22 KT stood at Rs 4, 499 per gram.
Sriram Iyer, Senior Research Analyst at Reliance Securities said, "Gold and silver fell to 2-week low initially on Wednesday’s session. This is mainly due to easing of lockdown restrictions around the world which was fed with optimism, the global economy could rebound quicker than previously anticipated."
The gold recovery took place despite rising US-China tensions and a weaker dollar, he added.
In the case of MCX's June contract for gold, it has bounced back to nearly 45,800 levels. Iyer states this indicates bulls are active around these levels. "However, to continue bullish momentum prices should sustain above 46,300 levels."
Technically, LBMA GOLD Spot has bounced back from important support of USD 1,690 levels indicating that only a close and consolidation below the level will pull prices lower. "On the upside a breakout above USD 1,720 and close and consolidation above will push prices further upside, " Iyer added.
Meanwhile, SPDR Gold Trust exchange-traded fund said its holdings rose 0.21 per cent to 1,119.05 tonnes on Wednesday from 1,116.71 tonnes on Tuesday.
