Gold price near 4-month low. Should you buy?

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It's Right Time To Invest In Gold! Gold getting cheaper by Rs 10,000 from record high
It's Right Time To Invest In Gold! Gold getting cheaper by Rs 10,000 from record high




  • Gold price: The level of $1680 per ounce in international market is a sacrosanct cushion area for gold and is holding well for the past six months




Gold price at Multi Commodity Exchange (MCX) hit its 4-month low after sliding below 46,000 per 10 gm levels. At MCX, gold futures went down near 1.3 per cent in the last three trade sessions while silver price slipped more than 1.5 per cent in this period. According to commodity experts, this slide in yellow metal price is due to the strong US Dollar and US job data. However, they said that gold price in the international market has strong support at $1680 per ounce while at MCX, 44,700 to 45,300 per 10 gm is a good accumulation zone. In long-term perspective, gold price is positive and one should maintain ‘buy on dips’ strategy till gold price sustains above 44,700 per 10 gm at MCX.





Highlighting the triggers that will yet again fuel the gold price rally; Sugandha Sachdeva, Vice President — Commodity & Currency Research at Religare Broking Ltd said, “Rising cases of Covid-19, especially the Delta variant, in China and the US have stoked fears about derailing the global economic revival. Apart from this, due to the high commodity prices, global inflation concerns are persisting and equity investors may soon start to feel the valuation stretch as global indices are trading close to record highs. This may entice investors to switch to gold for portfolio diversification and as a hedge against inflation.”




On her suggestion to the gold investors; Sugandha Sachdeva of Religare Broking said, “In the short term, there can be some more decline in gold as an overhang of strong labour market recovery in the US and amid concerns that the US Fed will start paring back its pandemic-era stimulus sooner than expected, which has buoyed the greenback. Nevertheless, the outlook for gold in the long-term remains positive. The level of $1680 per ounce in international market is a sacrosanct cushion area for gold and is holding well for the past six months. At MCX, 44,700 to 45,300 per 10 gm is a good accumulation zone for long-term investors. One should start buying as and when the yellow metal comes in this range as the precious bullion metal is expected to reverse course after this time-wise and price-wise correction in coming months.”




Highlighting the reason for sharp correction in gold price; Anuj Gupta, Vice President — Commodity & Currency Trade at IIFL Securities said, “We have seen sharp correction in gold price due to strength in US Dollar and robust US economic data. In fact, US Dollar is hovering on 4-month high levels; however, gold price is hovering at 4-month low levels. In short-term perspective, gold may trade with negative bias, however increasing delta variant may curb sharp correction in Gold prices. Long-term trend still looks positive for the yellow metal and investors are advised to maintain buy on dips strategy till gold is above $1680 per ounce in international market.”




On his suggestion to gold investors in current market scenario; Anuj Gupta of IIFL Securities said, “Gold price has strong support at $1680 per ounce levels in the international markets while at MCX, it has strong support at 45,300. So, one can continue buying till the precious metal is above this mark. In next one week to two week, gold price is expected to remain range-bound between 45,300 to 46,700 per 10 gm at MCX. So, gold price coming closer to 45,300 should be seen as an opportunity to buy for long-term maintaining stop loss below 44,700. The immediate target for the yellow metal would be 46,700 while in next two to three months, MCX gold price may go up to 48,500 to 49,000 per 10 gm levels.




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