Informist, Thursday, Dec 2, 2021
By Chinmay Mungse and S. Anirudh Iyer
MUMBAI/NEW DELHI - Uncertainty caused by the discovery of a new variant of COVID-19 and possible monetary policy tightening by the US Federal Reserve at its upcoming meeting have created a very interesting scenario for gold prices in the current month.
Some expect prices of the yellow metal to rise as the Omicron variant has cast a shadow on recovery in the global economy.
Majority of the traders and analysts polled by Informist expect gold prices to be range-bound this month. The average of forecasts of the 11 poll participants pegs futures contracts of the yellow metal at 46,883-49,239 rupees per 10 gm on the Multi Commodity Exchange of India. On COMEX, gold is seen at $1,748.8-$1,844.5 an ounce.
Currently, the most active February contract on MCX is at 47,684 rupees per 10 gm and the February futures on COMEX at $1,777.7 an ounce.
Comments by pharmaceutical major Moderna's Chief Executive Officer Stephane Bancel, that the vaccines available currently may not be as effective against Omicron, rattled markets and spurred demand for gold.
Other companies such as Pfizer and AstraZeneca are conducting laboratory tests to determine the efficacy of existing vaccines against the newly-found variant.
"If most of the vaccines are ineffective against the new strain, we might witness lockdown again which will further boost safe-haven demand for gold," said Sriram Iyer, senior analyst at Reliance Securities.
However, investors are worried the Fed may announce a sooner-than-expected rate hike and a quick end to its asset purchase programme, which may take the shine off the yellow metal.
"The Fed is already under pressure to curb inflation. Gold is expected to trend sideways to negative for the month as investors are expecting a timeline for interest rate hikes," said Tapan Patel, senior analyst at HDFC Securities.
In physical markets across the country, demand for jewellery in the ongoing wedding season is likely to keep gold prices elevated till Dec 15, said Prithviraj Kothari, president of India Bullion and Jewellery Association.
Demand may fall for a month after Dec 15 as the period is considered inauspicious, but immediately resurrect and remain elevated till the monsoon in 2022, Kothari said.
Following is a summary of the poll by Informist on gold prices in December and details of estimates by respondents, in alphabetical order:
| ANALYSTS/TRADERS | DOMESTIC PRICE | INTERNATIONAL PRICE |
| (rupees per 10 gm) | ($ per ounce) | |
| ABans Group | 46,000-49,400 | 1,714-1,841 |
| CR Forex Advisors | 46,900-47,330 | 1,728-1,875 |
| Dhani.Co | 47,300-49,000 | 1,760-1,870 |
| Finlit Consulting Pvt Ltd | 47,000-50,000 | 1,770-1,830 |
| HDFC Securities | 45,800-49,200 | 1760-1850 |
| India Bullion and Jewellers Association | 48,000-50,500 | 1,770-1,815 |
| Kedia Comtrade | 46,500-49,050 | 1,720-1,840 |
| Kotak Securities | 46,800-49,500 | 1,750-1,860 |
| LKP Securities | 46,900-48,600 | 1,765-1,805 |
| Prithvi Finmart | 47,660-48,800 | 1,750-1,834 |
| Reliance Securities | 46,850-50,250 | 1,750-1,870 |
End
US$1 = 74.96 rupees
Edited by Aditya Sakorkar
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