Gold prices may hit Rs 65,000 level by Diwali; silver likely to touch Rs 90,000-mark

Gold prices climbed to Rs 57,000 per 10 gm level on Friday after registering a steep fall by a huge margin on August 11 in the wake of rupee depreciation. The abrupt crash of over 5 per cent came amid a Russian coronavirus vaccine announcement and completion of talks for additional US stimulus. This resulted in massive profit booking by investors.

The big question, in this high volatility period, is how the yellow metal will perform in the near and long term. Gold and silver prices witnessed a lot fluctuations this week.

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Experts believe gold rates will continue to go up albeit minor swings. Gnanasekar Thiagarajan, Director at Commtrendz told the Economic Times that "gold will continue to go up" while silver prices will follow "but in a muted way". He added that "in dollar terms, gold price target is at $2,100 in the near term and $2,350 by December." Talking about silver prices, Thiagarajan expressed that "Silver will hit $30 in the short term and $33 by December. In rupee terms, gold may hit Rs 65,000 before Diwali and silver Rs 90,000."

Another industry expert, Hareesh V, Head of Commodity Research at Geojit Financial Services, told the publication that the current rally in silver prices had no fundamental grounds, they soared "in a purely speculative move and tracked the momentum in gold, which brought the gold-silver ratio lower."

Giving an estimate of the how gold will perform in future, Hareesh stated that he is "still positive on gold" and added that the yellow metal's prices are likely to hit around Rs 62,000 in a year. He, however, underlined that "we expect a correction in the near term. On silver we are not bullish. We had a target of Rs 75,000 which has already been hit."

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Gold prices jumped Rs 730 to Rs 53,691 per 10 grams in the national capital on Friday amid rupee depreciation, according to HDFC Securities.

In the previous trade, gold had closed at Rs 52,961 per 10 grams.

Silver also gained Rs 1,520 to Rs 70,500 per kg, from Rs 68,980 per kg in the previous trade.

The rupee settled 6 paise lower at 74.90 (provisional) against the dollar on Friday, tracking weak domestic equities.

However, in the international market, gold was trading marginally lower at $1,951 per ounce and silver at $26.91 per ounce.

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