Last Updated : 20 December 2012 at 14:40 IST
When the question was put forth to Kunal Shah,Head of Commodity Research at Nirmal Bang and Manoj Kumar Jain, President, Commodity & Forex Business; India Nivesh Commodities, we received interesting answers.
While Manoj Kumar Jain is not bullish on gold for 1-2 months, Kunal Shah says he is “not very optimistic” on gold for at least two quarters.
Says Kunal Shah: “You may see that S&P has upgraded Greece's credit rating...this proved negative for gold. All those who anticipated an eventual falling apart of the bloc had been buying gold.”
One of the top-notch credit rating agencies in the world, S&P or Standard & Poor's has upgraded Greece's credit rating by 6 notches; but has kept its devalued bonds in junk status.
The latest round of QE, ETF buying and easing measures by Japan should have made gold prices to go off the roof. But the improving economic outlook is keeping prices down.
“In two quarters, if it moves up, gold could go only up to $1750 and on the event of a further crash, it may go down to $1625.” Kunal Shah added. “Gold is expected to be an under-performer rather than an out -performer.” he said.
Citing Obama, he said the US fiscal cliff issue would be resolved before it is Christmas. He pointed out that Emerging Markets especially China, is growing in a good way and countries like South Korea are almost back on track.
“Stability is coming back...” Kunal Shah concluded. He considers it premature to make a comment on the upcoming debt-ceiling debate scheduled for next year in US.
Bearish on Gold for coming two months
“ I am bearish on gold for the next two months” said Manoj Kumar Jain, President, Commodity & Forex Business; India Nivesh Commodities.
“I expect gold to have a resistance at $1700 levels and on weekly close at $1660, the prices could dive to $1600.” he added. “In INR, that would mean a weekly close at Rs.30850 could take the prices to Rs.30100. Resistance is expected at Rs.31450.”
Rupee appreciation is also a factor that should be watched for as that too can contribute to the downside in gold, he said.
Summing up, one can infer that gold, the ultimate safe haven is in doldrums and it may take a while for gold bulls to see a relief rally, if there could be one.
No comments:
Post a Comment