In front of the wedding season, gold costs surged for the 6th straight day on Friday, taking off by `95 to exchange over a 5-month high of `27,670 per 10 grams on positive worldwide prompts and wedding season request. This is the longest winning streak for the yellow metal this year as such.Comprehensively as well, gold increased more than 3 for each penny so far this week and is on course for its greatest increment since early January. An insecure worldwide economy has lifted purchasing enthusiasm for gold, making it among the best performing resources with a year-to-date addition of almost 9 for each penny. Spot gold remained at $1,157.20 on Thursday, its most noteworthy since October, 29.
Amit Rathi, MD, Anand Rathi Financial Services said ; “Gold is an inflation hedge and hence the desire to hold gold will be subdued,” . But, gold and other correlated commodities have not been giving positive returns since past three years and 2016 should not be expected to be any different, say analysts. In fact, spot gold ended with (-6) per cent return in 2015 and about (-)8.5 per cent CAGR for 2013-15.
“The dollar is at its strongest in 10 years and is getting stronger as the rest of the world currencies are turning weak. The US Fed has moved towards tight monetary policy after almost 9 years and there is a high chance that it will continue to hike rates in 2016. This would lead to a rise in demand for dollar and pressure on prices of correlated commodities such as bullion, oil,copper,” said Amit Rathi.