- Importance gold India
- Impact of COVID-19 on gold prices and demand
- Spot Gold Technical Analysis
The history of gold in India
Traditionally,gold is deeply rooted in Indian culture and is highly respected throughout the country. The storage of gold is considered the norm in India and is used in countless Indian lives. Hindus are often seen at favorable events decorating gold jewelry dating back thousands of years with traditional Hindu texts. These texts depict gods and goddesses with gold, leading to the prestige of gold today. Native American society. See importance filtered for all aspects of life such as dowry, land / business capital and source of wealth.
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Increase in coronavirus cases
In view of the current COVID-19 pandemic and the proliferation of new cases in India, demand for gold has declined significantly. The slowdown in economic activity and fewer weddings have contributed to the local gold slump. Historically, the June quarter should expect an increase in gold purchases. In addition to current declining demand, local restrictions have halted the opening of gold and jewelry stores. India, the second largest consumer of bullion, is likely to be affected by spot gold.
New COVID-19 cases: India
Source: Compiled by the chart Warren Wenket, Refinitiv
Recently, a slight consolidation can be observed local gold prices (see chart below) however, a safety suit can take over as the number of cases worldwide increases. Together US dollar As the recent weakness of the dollar has a major impact on the price of gold, it has strengthened the price of gold psychological $ 1800.00 level is exceeded.
Technical Analysis: Spot Gold Exceeds $ 1,800!
Source: Compiled by the chart Warren Wenket, IG
The supporting dollar and the 10-year decline in US Treasury interest rates have gone through a long-term downward trend. The resistance of the upper channel has lasted since the beginning of January 2021, shortly after which a short break was reduced. With yesterday’s price candle closing up $ 1800.00 / oz as well as the channel barrier, there could be more opportunities for further rise. 38.2% Fibonacci level $ 1838.60 / oz acts as an initial resistance when gold pushes into overbought territory Relative Strength Index (RSI).
Alternatively, this step may be short-lived and pricing may fall below channel resistance, in line with a recent historical trend. Should this happen, settle down $ 1,765.51 / oz the support zone provides the bears with a key level for monitoring.
Will the current situation in India have any significant impact on gold prices in the future?
Gold prices are likely to be the last thing Indian citizens think, but the devastating effects on COVID-19 could have a systemic effect if the mutated strain were to reach the rest of the world. This could lead to a decline in global demand for gold, but the shelter / shelter that gold provides as a safe haven may outweigh the current decline in demand. The pandemic is a priority at the moment, and curbing it is likely to pave the way for yellow metal.
The third quarter of 2021 is interesting because the repressed purchases of the second quarter could lead to a significant increase if India’s economy recovers.
– Written by Warren Venketas for DailyFX.com
Connect with Warren on Twitter: @WVenketas