However, analysts still believe gold will resume the bull-run and touch Rs 40,000 in the Indian market before Diwali.
Chennai: Gold prices remained highly volatile on Tuesday as they touched all-time high levels during the early part of the session, only to fall Rs 1,300 per 10 gm later in the evening. Comex gold too gained $28 initially and lost $55 per ounce during the course of the session. However, analysts still believe gold will resume the bull-run and touch Rs 40,000 in the Indian market before Diwali.
In the Comex futures market, near-month contract of gold initially moved up to $1,546 per ounce during the intraday on Tuesday from the previous close of $1,519. With strong fundamentals supporting safe haven demand for gold, the Hong Kong protests acted as a geo-political trigger for increased purchases by investors, said Jateen Trivedi, Technical Research Analyst at Bonanza Portfolio.
The protests in Hong Kong against the Chinese government continued on Tuesday.
Meanwhile, Argentina’s stock markets fell 35 per cent and the currency by 25 per cent after the president was trounced in the primary election. The currency’s fall was viewed by the markets in the back-drop of the ongoing currency war between the US and China. The trade war has been a pushing up gold prices in the past few days.
However, later in the evening on Tuesday US Trade Representative updated that additional tariffs on some Chinese goods, including cell phones and laptops, will be delayed till December 15. This saw a sharp rise in equity markets and sell-off in bullion.
From $1,546, gold prices came down to $1,490. Silver too fell from a high of $17.48 an ounce to $16.51.
In the Multi Commodity Exchange, gold had moved up to Rs 38,660, a new all-time high, from the previous day’s close of Rs 38,240. Silver had gained close to 2 per cent in the MCX to touch Rs 44,585. The rupee had added to the glitter of the gold when it further depreciated to six-month low of 71.4 on Tuesday.
However, after the trade update from the US, gold in the MCX too fell to a low of Rs 37,344, losing more than Rs 1,300 in a session. Silver too fell from Rs 44,585 per kg to Rs 43,250.
“Trade update has led to a knee-jerk reaction in the market. However, the broader fundamentals, which have been triggering the bull-run in bullion, are still intact. Hence we still expect that gold can move up further in the medium-term,’ said Trivedi.
“With gold coming closer to Rs 39,000 levels, it won’t take much longer to touch Rs 40,000. We might probably see those levels before Diwali if the fundamentals remain strong. In the international market, we can look forward for $1,600 - $1,650 levels,” he said.
“We expect gold to remain firm on various economic issues across the globe, although mild profit booking may keep prices under pressure near key resistance levels,’ said Abhishek Bansal, Chair-man, Abans Group.