Your gold price is shooting through the roof! Shockingly, crude oil rates are not rising

Gold vs Crude: The geo-political tension going on between the US and Iran has helped gold prices to shine while the crude oil prices have remained almost range-bound between $53/barrel to $58/barrel levels. However, as per the commodity market experts, gold prices are rising not just because of the Middle East war-like situation. Deep down interest rate cut announced by the US Federal Reserve from July onwards and IMG's negative global GDP forecast are also reasons. In fact, the latter are more responsible for gold price rise and crude oil rates remaining flat. According to experts, had the geo-political tension not been there, gold prices would then have escalated, but crude oil prices would have crashed heavily. They say that crude oil prices are being able to hold ground only because of the geopolitical tension.

Speaking on the gold and crude price relation currently at COMEX Anuj Gupta, Deputy Vice President — Currency and Commodities at Angel Broking said, "Major trigger for gold price appreciations are mainly the interest rate cut by the US Federal Reserve and the negative global GDP growth forecast by IMF while the ongoing geopolitical tension has further fuelled the global gold prices. In fact, the crude oil prices have scaled high had the Fed and IMF factor was not there. In fact, the geopolitical tension has helped crude oil prices to hold its ground otherwise it would have tumbled heavily at various commodity exchanges." Gupta said that gold prices are expected to go up to $1460 to $1480 per ounce levels by the Diwali season and at MCX, one can expect Rs 36,000 to Rs 36,500 per 10 gms of gold.

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Amit Sajeja, Deputy Vice President at Motilal Oswal Commodities said, "Crude oil prices are not rising as the gold prices are because people have a cue from the past that such geopolitical tensions are temporary and it is not going to hold long. If we look at the technicals, the chart for crude oil looks weak as the Fed cutting its interest rate deep down and IMF giving the negative forecast for the global GDP. Had the geo-political tension not been there, the crude oil prices would have tanked for sure." However, Sajeja said that crude oil prices are expected to remain range-bound between $53 per barrel to $60 per barrel and its future outlook would be visible once the winter inventory in October and November would be the deciding factor for crude oil prices.

Reiterating his stance on gold and crude oil prices Gupta of Angel Broking said that whatever be the winter inventory of the crude oil, gold prices and crude oil prices are expected to remain in inverse proportion for next 4-5 months.: