India Gold hit a fresh record high tracking gains in international spot prices which surged past $1,600 an ounce mark after Iran fired rockets at Iraqi airbase which hosts US forces that triggered risk-off sentiment.
“The jump in the price of what’s viewed by investors as a safer asset in times of political and economic uncertainty came after Iran’s missile attack on US-led forces in Iraq early on Wednesday,” said a Reuters report.
On the MCX, gold contracts for February were trading higher by Rs 562, or 1.38 percent, at Rs 41,225 per 10 gram at 0920 hours. It hit a record high of 42,278 per 10 gm.
Experts are of the view that both Gold and Silver are likely to trade higher and dips should be used to buy, and investors should avoid going short at higher levels.
On Gold, 40,400 level is likely to act as major support while Silver could find support near 47,700 levels in the domestic market.
Buy on dips strategy still working in both the precious metals as tensions escalate in the Middle East.
Gold prices sustain above $1600 could extend rally towards $1630-1640 levels and Silver prices sustain above $18.50 could extend rally towards $19-19.20 levels in the international market.
Trend strongly bullish and recommend to buy on a dip in both the precious metals and avoid short sell.
The Middle East crisis flared up again after Iran attacked military facilities in Iraq hosting American troops in its first retaliation to the killing of a top general by US forces last week. It wasn’t immediately clear whether there were casualties or major damage from the attacks. The US confirmed the attack with President Donald tweeting: “Missiles launched from Iran at two military bases located in Iraq. Assessment of casualties & damages taking place now. So far, so good! We have the most powerful and well equipped military anywhere in the world, by far! I will be making a statement tomorrow morning.”
Apart from geopolitical tensions in the Middle East, gold is likely to get further direction from US monthly non-farm payroll data, due on Friday. The US Federal Reserve will also take cues from payroll data to decide the policy path in 2020, he added.
