Due to mixed signals from the US Federal Reserve on interest rates, the price of gold is currently at its 2-month low. However, commodities experts believe this is a good opportunity for gold investors, as growing fear of the Delta variant of Covid-19 in Asia and Europe could support demand for safe haven for the precious metal after the recent correction. They advised investors to maintain the buy-on-dip strategy until gold is trading above $ 1,720 an ounce in the international market. They said that the price of the yellow metal on Multi Commodity Exchange (MCX) has strong immediate support at ₹46,500 and ₹45 100 per 10 g. Expecting a trend reversal for precious bullion in the second half of this month, experts predicted ₹52,000 per 10 g at MCX at the end of 2021.
Reason for the fall in the price of gold
Revealing the reason for the collapse in the price of gold, Sugandha Sachdeva, vice president of commodities and currency research at Religare Broking Limited, said: wait for other clues to assess the Fed’s position in the future. In addition, the dollar index recorded a decent recovery from the Fed’s hawkish tilt earlier in the month, which weighed on gold prices. “
Gold price: Trend reversal strongly expected
However, Sugandha Sachdeva of Religare Broking expects a strong rally in the price of gold, saying: Precious metal after the recent correction. The dominant dollar strength is also expected to pause amid progress on US President Biden’s ambitious $ 1.2 trillion infrastructure program, which is expected to support the recovery of the precious metal. “
Investment strategy for investors
Advising gold investors to maintain buying strategy in case of decline in current scenario Anuj Gupta, vice president of commodities and currency trading at IIFL Securities, said, “This sharp drop in the price of gold yellow metal is a great opportunity for gold investors. They should continue to buy on the dips to gold. the international market price is over $ 1,720 per ounce. We could also see a trend reversal in the price of the precious metal from $ 1,750 per ounce as it functions as current immediate support for gold. “
INR against USD
Sharing the main levels to keep in mind from a domestic market perspective, Anuj Gupta of IIFL Securities said, “In the current market scenario, the price of gold at MCX enjoys strong immediate support at ₹46,500 per 10 g while it has a strong support is ₹45,800 per 10g level. He said the recent rise in yellow metal rates should not be seen as the precious metal bottoming out, as the rise is due to the depreciation of the Indian National Rupee (INR) against the US dollar ( USED).
Gold Price Outlook
Sugandha Sachdeva of Religare Broking said: “The established price for gold indicates that the metal is consolidating near the key support area of ₹46,500 to 46,300 per 10g after dropping considerably and should see a short term rebound. An increase seems plausible towards ₹47,500 by 10g mark initially, which may extend further towards ₹48,100 per 10g brand for the coming month. On the contrary, a sustained close below the mentioned support could trigger selling pressure, pushing the metal lower towards ₹45,500 to ₹45,300 per area of 10 g. “
Asked about the medium to long term gold price target, Anuj Gupta of IFL Securities said, “The price of gold could go up to ₹50,500 over the next 3 months while by the end of this year we might see the yellow metal listing at ₹52,000 per 10 g at MCX. “
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