Equity Bleeds But Gold Leads

Just yesterday ValueHunter posted a blog on why investors should invest in gold and the reason is this mega record rally

Gold prices extended their gains for the sixth consecutive day to hit a new record high of Rs 47,861 per 10 gram in the Mumbai bullion market on a weaker rupee versus dollar. The yellow metal edged up on increased US-China tension and weak economic data boosted its safe-haven appeal.

The rate of 10 gram 18, 22 and 24-carat gold in Mumbai was Rs 35,896, Rs 43,841 and Rs 47,861 plus 3 percent GST.

According to Navneet Damani, Vice President, Motilal Oswal, gold inched higher to its highest since October 2012 as worries regarding the souring US-China relations and bleak US economic data underpinned the safe-haven metal. He expects domestic prices to hover in the range of Rs 47,600-48,050.

ValueHunter Souvik believes that gold may touch a high of INR 52000 if things doesn't improve.

We expect gold to continue to trade with a positive momentum unless there is an improvement in the virus-related situation or easing of US-China trade tensions. Weak economic data from US and Federal Reserve's warning of dip in tghe GDP numbers spurred buying in precious metals.

The gold/silver ratio currently stands at 99.46 to 1, which means the amount of silver required to buy one ounce of gold. Silver prices gained Rs 3,085 to Rs 48,120 per kg from its closing on May 15.

In the futures market, gold touched an intraday high of Rs 47,980 and an intraday low of Rs 47,560 on the Multi-Commodity Exchange (MCX). For the June series, the yellow metal touched a low of Rs 36,572 and a high of Rs 47,980. Gold futures for June delivery gained Rs 488, or 1.03 percent, at Rs 47,869 per 10 gram in evening trade on a business turnover of 12,764 lots. The same for August delivery jumped Rs 515, or 1.08 percent, at Rs 48,084 on a business turnover of 9,235 lots. 

The value of the June and August contracts traded so far is Rs 2,879.02 crore and Rs 354.97 crore, respectively. 

Similarly, Gold Mini contract for June rose Rs 500, or 1.06 percent, at Rs 47,852 on a business turnover of 10,449 lots.

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