Gold seems to be hunting with the foxes and running with the hares. In the last few trading sessions, the yellow metals wards of pulls and threats based on its strong fundamentals during the trading in Asian and European markets.
However, in New York trading, propelled by professional buyers, the yellow metal usually ventures into the upside of its range. On Friday, gold was influenced mainly by the growing panic caused by the spread of the coronavirus (Wuhan) as more cities and over 41 million people were isolated in China itself. The death toll too is on the rise. As the virus spreads all over the globe it could become the main driver for the gold price. Even otherwise, gold moved higher in New York trading on mixed IHS Markit PMI data and the Chinese New Year on the 25 th of January.
On Friday, the yellow metal first opened lower in London at $1,561.85 per ounce (London am fix), only to rebound and close in London at $1,564.3 per ounce. Thereafter, in NY trading the yellow metal soared to over $1,576 per ounce at one stage before closing for the week in the $1,571-72 per ounce region. Next week’s US Fed meet on its monetary policy and the Bank of England’s meet in the wake of Brexit could see the gold price continue its forward march. But, the Wuhan virus could overshadow all global markets. Stock markets and currencies could falter while gold could find its wings, albeit temporarily.
In the domestic markets, gold opened with a gain of Rs.143 at Rs.40,166 per 10 gms and closed in Mumbai slightly lower at Rs.40,157 per 10 gms (IBJA rates 999 gold) on Friday, 24 th January 2020.
The yellow metal withstood the surge in the stock markets in the last three days, but was aided by the weaker rupee around the Rs.71.30 to a USD region. Moreover, the upward trend in overseas markets, particularly the US markets, saw gold hold its own in the domestic market. Silver, too, opened higher than its previous close with a gain of Rs.260 to open at Rs.46,080 per kg and even ended further higher at Rs.46,145 per kg. Both the precious metals are likely to open higher next week based on international trends.