Are you heading towards the market for last-minute purchase of gold for today’s auspicious occasion of Akhaya Tritiya? And are you worried whether this is the right time to buy given the sudden spurt in gold prices in recent weeks? You can go ahead and add the yellow metal to your portfolio, with brokerages, asset managers and jeweller’s all bullish on the price prosects going forward.
Angel Commodites feels gold’s prospects for a sustained price rally “are better than they have been for years” as a weaker dollar, crashing oil prices and concerns about the global economy have revived its safe-haven status.
“We advise investors to buy gold on the occasion of Akshay Tritiya for sustained price rally in the near term. However, our advice to investors would be to buy gold in a staggered manner rather than concentrate all your purchases at one go. One should take the benefit of value cost averaging to invest in gold,” Angel Commodities has said in a Akshaya Tritiya Special Report on Gold.
“We see strong support for gold at Rs 28,000-28,500 mark. Below Rs 28,000 mark it support is seen at Rs 26,700 mark. On the other side resistance can be seen at Rs 31,500-32000 followed by next resistance level towards Rs 34000–34500 mark,” the brokerage has said.
Angel Commodites has pointed out further trajectory of gold prices will be totally dependent on the economic numbers coming from the nation. According to the report from World Gold Council, the implementation of negative interest rate policies by leading global central banks, the return of pent up investment demand for gold, price momentum i.e. investors following gold’s upward trend are factors that will result in higher demand for gold in the coming months.
Chirag Mehta, Sr. Fund Manager-Alternative Investments, Quantum AMC agrees. “We suggest that this Akshaya Tritiya that one can participate and buy gold,” Mehta said.
Mehta felt gold was “on a solid foorting” given trends in global macro-economic scenario. “Real interest rates will probably stay low even if the Federal Reserve raises borrowing costs in response to higher inflation. However, the Fed will remain cautious as US domestic growth and global growth continue to be sluggish. If the Fed gets more worried about declining growth and lower inflation and changes its stance by launching a renewed quantitative easing program (which is quite possible), it would be a significant boost to gold prices,” he said.
Ishu Datwani, founder, Anmol Jewellers, also felt prices would move up. “Going forward we will prices will move up. Whenever prices move up, which has been happening of late, consumers tend to move in which keeps prices buoyant,” Datwani told FeMoney. Gold closed at Rs 30,003 per 10 grams on May 6. It has risen nearly 22 per cent since January 1, 2016.
SMC Research is however cautious. “Akshaya Tritiya on May 9 can improve gold demand to some extent,” it said. It felt that gold is expected to remain on sideways path as bounce back in dollar can lead to profit booking while safe haven buying amid tumbling global markets can cap the downside.