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Russia Covid vaccine link in gold price fall, expect surge to resume

Aug 12, 2020 18:22 IST

Even as gold fell over 5% in just two sessions to ₹50,000 per 10 gram after hitting a high of ₹56,000, analysts remain highly bullish on the yellow metal as they expect the recent rally to resume soon.

Fall in the prices was mainly due to the profit booking as global risk sentiment improved after Russia cleared the first-ever coronavirus vaccine for use. A 10 basis points spike in the US 10-year treasury yields also led to some shift of investment from the bullion.

This is not the end of the road for gold and silver prices and the rally will resume after prices consolidate lower, analysts at Commerzbank said.

In the international market, gold fell below the $1,900 per ounce level on Wednesday as a resurgent dollar prompted investors to reassess their positions after a record-breaking price rally.

It is the right time of profit booking in Gold and Silver, however, the trend of bullions is still positive, Angel Broking said.

Just as gold hasn’t dropped below $1,000 an ounce since 2009, notwithstanding a prolonged slump through most of the decade, once the current volatility has cleared it's unlikely to see the south side of $1,700 again, either, Bloomberg mentioned in its report.