History has a strange way of repeating itself. For, when George Bush Sr. announced Operation Desert Storm, on January 15, 1991, to oust Iraqi occupation forces from Kuwait, gold jumped by over $10 per ounce to cross $400 per ounce and close at $403 per ounce on the 16 th . However, when the war actually began, the gold prices crashed to close on the 17 th at $379 per ounce.
Thereafter, even after the cease fire on 28 th February, gold did not regain the $400 per ounce level that year again. Likewise, gold soared by over 6% from the dawn of 2020 after drone attack that killed the Iranian No2 at Baghdad airport, the Iranian missile attack on US military bases in Iraq saw gold touch $1613 per ounce on the 8 th . However, after it became evident that both sides did not want to escalate matters further, the yellow metal shed most of its gains and closed in London (pm fixed) on the 9 th at $1,550.85 per ounce, it fell even more during the day. In fact, the yellow metal had one of its worst trading sessions as it shed almost 4% in a single day.
The domestic gold price soared first on the international trends and the weaker rupee to Rs.40,851 per 10 gms on the 8 th , being a price taker (with a correlation of almost 1 to the international gold price) it closed the day on the 9 th at Rs.39,881 per 10 gms, below the levels seen on the 3 rd evening.
So, what is in store for gold on the 10 th ? With gold closing at $ 1552-53 per ounce in New York, the yellow metal is likely to open slightly higher than the closing on the 9 th in Mumbai (IBJA rates). Thereafter, gold could go in for some consolidation in the international markets. It could be another very volatile day for the yellow metal. Investors could continue to adopt the wait & amp; watch policy as neither buyers nor sellers are likely to venture out. Moreover, with demand for gold likely to emerge only after Makar Sankrant, it is not expected to rear its head yet. For, demand is generally subdued during the inauspicious period of a month prior to the festival of kites in some regions of the country.
Gold (Rs.per 10 gms) am pm
Jan 7 40488 40537
Jan 8 41253 40851
Jan 9 40046 39881
Disclaimer: This is not a guide for speculators.
