According to a report by ICICI Direct, gold prices are expected to move towards a new high of Rs 70,000, while silver, supported by increasing industrial demand, may see an uptrend towards Rs 85,000.
The anticipated rise in gold prices is attributed to a weak dollar and a decrease in US treasury yields. The dollar and yields have experienced a decline due to the expectation that the US Federal Reserve will initiate rate cuts as early as March 2024.
The report highlights that concerns about slower global economic growth and escalating geopolitical tensions in the Middle East could continue to position gold as a valuable hedge against uncertainties.
Furthermore, central banks are expected to persist in their buying spree, diversifying their reserves and contributing to the upward trajectory of gold prices.
In contrast, the report suggests that crude oil prices may encounter resistance around $90, influenced by weaker demand. It anticipates that crude oil prices will likely remain in a range of $60-$90, as the market balance may be maintained, with OPEC less likely to extend voluntary output cuts alongside increasing production in non-OPEC countries.
Uncertainty over economic growth is expected to slow global oil demand growth, and the report notes that escalating tensions in the Middle East may prevent oil prices from dipping below $60. The report suggests that MCX crude oil prices could see a further decline towards Rs 5,000 levels in the coming month.
(With Agency Inputs)
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