Spot gold prices hit an all-time high of Rs 61,000 per 10 grams in India on Monday. On a weekly basis, Gold prices are up over 6 percent, marking their best gains over the last four-and-a-half months.
Gold prices in Australia also touched their peak of $2,922 an ounce, fuelled by the falling value of the Australian dollar against the US dollar.
The Comex gold prices also witnessed a rally, hitting an 11-month high of $1,997.80 per troy ounce.
The ongoing banking crisis globally has raised expectations that the US Federal Reserve will ease up on its aggressive rate hike cycle after its two-day meeting starting Tuesday, March 21.
Before the collapse of Silicon Valley Bank, it was expected that Fed policy makers would raise rates by as much as 50 basis points. But after the recent financial turmoil that led to emergency liquidity measures from the Federal Reserve and major central banks, most analysts are now pricing in a 25 basis points rate hike.
According to a note by JP Morgan last week, up to $2 trillion in liquidity could be added to the US banking system by the Federal Reserve. Funds will be made available through its Bank Term Funding Program that was announced as banks face a liquidity crunch.
This week will see inflation data emerging out of Japan, UK and Canada, while the Bank of England, SNB and Norges Bank will come out with monetary policy updates besides the Fed.
The US, Japan, the UK, Eurozone, Germany and France will also report PMI data this week.
"The rally in the yellow metal is primarily due to the banking crisis in the west," Colin Shah of Kama Jewelry said. "We expect gold to gain further and touch new highs in the next few months. Domestically, it is expected to trade in the range of Rs 61,000-62,000/ 10gm. Internationally, it may scale levels of $2,050-2100/oz.”
Speaking to CNBC-TV18, Surendra Mehta, Secretary of India Bullion & Jewellers Association (IBJA) said that he expects gold to hit $2,150 per ounce in 2023.
“I feel gold is heading towards $2,010 per ounce, most probably today itself. I have been telling everyone that don’t take gold lightly. After 22nd March if the Fed does not raise interest rates or raises by only 25 basis points, then probably gold could be heading towards $2,038 per ounce. Investors who are looking for a long term trade should buy at current levels because I think gold is headed towards $2,150 per ounce in 2023, which should be roughly about Rs 63,500-64,000 in Indian market,” Mehta said.
First Published: Mar 20, 2023 3:38 PM IST
