Gold may reach Rs 65,000 by the end of 2020

Gold and silver prices fell in early trade on Monday as traders booked profits while waiting for clarity on the U.S. Fed policy. A slew of restrictions in several European cities checked the drop in prices.

Despite an exceptional performance in the first half of the year, while gaining more than 25% from its March lows, The yellow metal has outperformed by a significantly long margin.

Indian passion for precious metals is well-known. It will not be strange if most Indians invest in this asset, in physical form throughout the festive season, despite its skyrocketing costs.

Thanks to the government’s fiscal stimulus and low-interest rates, it has already increased to Rs 50,000 mark and may reach Rs 65,000 per 10 gram by the end of the year.

Though equity markets have bounced dramatically, gold’s security has increased investor appetite for these testing times.

Gold futures on the Multi Commodity Exchange decreased by 0.15 percent, which equals Rs 78 and settled at Rs 51,637 per 10 grams. Meanwhile, silver futures fell by 0.13 percent or Rs 87 and touched Rs 67,790 per kg.

According to HDFC Securities, the yellow metal prices boosted to Rs 52,672 per 10 grams, gained Rs 224 in the national capital on Friday, while silver was climbed by Rs 620 to Rs 69,841 kg.

Spot gold boosted 0.3 percent to $1,954.65 per ounce by 0118 GMT. US gold futures edged 0.1 percent lower to $1,959.90.

On September 15, Gold speculators boosted their net long position by 10,622 contracts to 165,251.

On Friday, Holdings in SPDR Gold Trust, the world’s leading gold-backed exchange-traded fund, gained 1.03 percent to 1,259.84 tonnes.

The decline of the dollar makes gold more attractive

Significantly, the dollar index decreased by 0.1 percent against its competitor. The decline of the dollar makes gold more attractive for holders of other currencies.

Gold prices increased on Monday, which was lead by a weaker dollar. Meanwhile, fresh COVID-19-induced curbs globally dented optimism of a swift economic rebound, with investor focus on speeches by Federal Reserve policymakers during this week.

At regular intervals, issuing by the government, sovereign gold bonds offer annual interest of 2.5%, paid semi-annually. They have a fixed tenure of eight straight years, though you can sell them after the lock-in period of 5 years.