Gold price near 6-month low. Should you start buying now?
The price of gold today hit its lowest level in 6 months on MCX (Multi Commodity Exchange) after reaching ??45,900 per 10g in the first trades on Monday and the drop in the yellow metal can be attributed to the strength of the US dollar (USD) in the Forex market according to commodities experts. However, they believe that the strong momentum in the dollar will not last long, as rising crude oil prices could cause global inflation to rise, pushing demand for gold in the commodities market.
Experts also said that geopolitical tensions in Afghanistan and the South China Sea could also help the precious investment metal become a “haven for investors” in the medium term. Experts have advised gold investors to view this drop as a “golden opportunity to buy” the metal, as prices could rise to as high as ??52,000 by Diwali.
Highlight the reason for the fall in the price of gold and the triggers that can lead to a trend reversal in the price of the yellow metal; Anuj Gupta, vice president of commodities and currency research at IIFL Securities, said, “The price of gold has fallen due to the strengthening of the US dollar in the international market. But that won’t last long as crude oil prices rise in the global commodity market. , which could fuel global inflation. In such a scenario, gold could once again become the haven for investors. Apart from that, the rapidly approaching festival season in India and rising geopolitical tensions in Afghanistan and the South China Sea could further stimulate demand for the precious bullion. “
Echoing the views of Anuj Gupta; Abhishek Chauhan, Head of Commodity and Currency, Swastika Investmart Ltd, said: “The festival and wedding seasons are likely to create demand for gold in India. Even central banks like Russia, China, and other banks add gold to their reserves, which can keep demand for gold intact. ETF buyers are also adding gold as a hedge against inflation. The price of gold at current levels is very attractive to medium to long term buyers. As the equity markets are at very high levels and any correction in the markets can create more demand for safe haven assets like gold which can help silver gain momentum. “
Speaking on the medium term gold price target; Anuj Gupta of IIFL Securities said: “Gold enjoys strong support at ??45,200 per 10 g at MCX and one should start to accumulate at ??45,500 to ??45,200 by 10g levels maintaining a stop loss at ??44,600 per 10g brand. Due to the rise in crude oil prices, the Fed’s accommodative stance on key interest rates and rising global inflation; the price of gold is expected to rise to ??50,000 by Diwali 2021. ”
Anuj Gupta of IFL Securities advised gold investors to wait for a few more corrections as the price of gold is today ??45,900 on MCX and it can still drop from here ??400 to ??500 per 10 g in the next trading sessions.
Abhishek Chauhan of Swastika Investmart said that the price of gold in the international market is currently trading in a range of $ 1,700 to $ 1,790 per ounce, which can go as high as R $ 1,850, and then to $ 1,900 per ounce. ounce in the medium term. He said the price of gold could go up to ??52,000 per 10g at MCX by this Diwali if there is no change in the Fed’s stance on key interest rates at the next Fed meeting.
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