Speaking to CNBC-TV18 David Lennox, Analyst at Fat Prophets said the markets are getting jittery about what will happen in a week’s time. That is bringing to the fore the safe haven aspect of gold, he said.
There will be considerable volatility because US dollar might react in the same manner as of someone who is going to take the White House. "If the US dollar is volatile, we would expect gold prices to follow suit. We do think the US dollar will weaken."Below is the verbatim transcript of David Lennox’s interview to Manisha Gupta.
Q: How are you looking at the global markets, the cues coming in from US market and what is your sense of where are we headed when it comes to gold?
A: Certainly at this stage it does suggests that the markets are getting very jittery about what is going to happen in a week's time in the US elections and that has been really bringing to the fore again the safe haven aspect of gold. We think that that is certainly going to continue up until such time as we know the outcome of the US presidential election.
Q: There are reports flying around that depending on who really is the next President. We could see gold prices going to USD 1,400 per ounce and even USD 1,500 per ounce on the higher side in next couple of three months. What is the kind of volatility that you are factoring in?
A: Certainly at this stage we would suggest that there will be some considerable volatility primarily because the US dollar is likely to react in the same manner as we know who is going to take the White House and then slowly as they release their policy. So, overall if the US dollar is volatile and we would expect that gold price will unfortunately follow suit we do however think that the US dollar will weaken and that is likely to put quite an impetus under the gold price and put it on a - we believe strong trajectory to the outside.
For entire interview, watch accompanying video.
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