Gold price loses glitter! Should investors buy in dip? Here’s where bullion is seen ahead
Gold prices have neared a five-week low! At MCX, gold futures erased their psychological ₹56,000 per 10-gram mark. A strong dollar and bond yields which were sparked by worries of more rate hikes from the US Federal Reserve after key inflation data, made bullion unattractive this week. Gold prices faced their third weekly drop! Nevertheless, the outlook for this yellow metal is likely to pick up momentum ahead and touch new chapters. By end of 2023, at home, gold is seen to range between 56,800-57,200. Investors are suggested to buy on the dips!
Gold prices have neared a five-week low! At MCX, gold futures erased their psychological ₹56,000 per 10-gram mark. A strong dollar and bond yields which were sparked by worries of more rate hikes from the US Federal Reserve after key inflation data, made bullion unattractive this week. Gold prices faced their third weekly drop! Nevertheless, the outlook for this yellow metal is likely to pick up momentum ahead and touch new chapters. By end of 2023, at home, gold is seen to range between 56,800-57,200. Investors are suggested to buy on the dips!
On Friday, gold futures for April 5, 2023, maturity — dropped to as low as ₹55,691 per 10 grams. However, the bullion ended marginally up to ₹56,255 per 10 grams compared to the previous closing. But the gold price is still lower by ₹525 from its previous Friday’s closing of ₹56,780 per 10 grams.
On Friday, gold futures for April 5, 2023, maturity — dropped to as low as ₹55,691 per 10 grams. However, the bullion ended marginally up to ₹56,255 per 10 grams compared to the previous closing. But the gold price is still lower by ₹525 from its previous Friday’s closing of ₹56,780 per 10 grams.
MCX gold futures tracked international spot gold. The spot gold was near $1,842 levels after earlier falling to its lowest level since late December last year. It has tumbled to around $1,830 levels as well. This week, the decline is more than 1%.
MCX gold futures tracked international spot gold. The spot gold was near $1,842 levels after earlier falling to its lowest level since late December last year. It has tumbled to around $1,830 levels as well. This week, the decline is more than 1%.
Colin Shah, MD, Kama Jewelry on gold prices said, “the price of the yellow metal has hit a 1-month low of $1835. The immediate fall in the price of gold is the result of the economic data in the US. The PPI data – a key inflation metric rose in January (MoM). This has led to concerns about Fed introducing more extensive rate hikes to control inflation. The data also pushed the Dollar index towards the 104 level, a higher dollar makes gold buying more expensive.
Colin Shah, MD, Kama Jewelry on gold prices said, “the price of the yellow metal has hit a 1-month low of $1835. The immediate fall in the price of gold is the result of the economic data in the US. The PPI data – a key inflation metric rose in January (MoM). This has led to concerns about Fed introducing more extensive rate hikes to control inflation. The data also pushed the Dollar index towards the 104 level, a higher dollar makes gold buying more expensive.
Shah added, “a higher USD and rising rates make gold buying less lucrative. Domestically MCX Gold too is trading at a 1-month low level. It has slipped below ₹56,000/10gm level in today’s trade. Back home too, the inflation has suddenly shot up vindicating the RBI’s latest rate hike, also sparking concerns that the central bank may not pause at the current level.”
Shah added, “a higher USD and rising rates make gold buying less lucrative. Domestically MCX Gold too is trading at a 1-month low level. It has slipped below ₹56,000/10gm level in today’s trade. Back home too, the inflation has suddenly shot up vindicating the RBI’s latest rate hike, also sparking concerns that the central bank may not pause at the current level.”
From a one-year perspective, Shah expects gold prices to recover as inflation eases, and the central bank pauses on rates. MCX gold may trade in the range of 56,800-57,200, internationally $1960-80 by the end of the calendar year.
From a one-year perspective, Shah expects gold prices to recover as inflation eases, and the central bank pauses on rates. MCX gold may trade in the range of 56,800-57,200, internationally $1960-80 by the end of the calendar year.
Meanwhile, Emkay Wealth Management believes the yellow metal is poised to open a new chapter. The levels 1860 and 1830 are strong support levels.
Meanwhile, Emkay Wealth Management believes the yellow metal is poised to open a new chapter. The levels 1860 and 1830 are strong support levels.
In 2022, gold prices garnered double-digit gains. The purchases of gold in international markets in the last year was 4000 tons of which 1400 tons took place in Q4, as per Emkay.
In 2022, gold prices garnered double-digit gains. The purchases of gold in international markets in the last year was 4000 tons of which 1400 tons took place in Q4, as per Emkay.
Emkay’s note said, “there was institutional buying too. Apart from this, the jewellery demand revived in China as the Chinese government relaxes Covid-19 related restrictions and reopened its economy. China is one of the biggest consumers of gold, accounting for over 30% of global jewellery demand.”
Emkay’s note said, “there was institutional buying too. Apart from this, the jewellery demand revived in China as the Chinese government relaxes Covid-19 related restrictions and reopened its economy. China is one of the biggest consumers of gold, accounting for over 30% of global jewellery demand.”
During January this year, the yellow metal posted over a 3% upside.
During January this year, the yellow metal posted over a 3% upside.
Going ahead, Emkay believes the general expectation that there will be a slowdown in economic activity in the major economies also is helping gold though the high inflation never propelled gold to higher levels.
Going ahead, Emkay believes the general expectation that there will be a slowdown in economic activity in the major economies also is helping gold though the high inflation never propelled gold to higher levels.
However, Emkay also pointed out that the dollar index is currently in a revival mode towards 103-106, and this could lead to some dips in gold prices. But the brokerage also added, “these dips may be opportunities to initiate fresh exposure to gold.”
However, Emkay also pointed out that the dollar index is currently in a revival mode towards 103-106, and this could lead to some dips in gold prices. But the brokerage also added, “these dips may be opportunities to initiate fresh exposure to gold.”
Emkay in its note said, short term exposure with a 1-year time horizon could be taken through gold funds, long term through Sovereign Gold Bonds.
Emkay in its note said, short term exposure with a 1-year time horizon could be taken through gold funds, long term through Sovereign Gold Bonds.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
