Gold price drops over 10 per cent! Is it right time to buy? This is what you should do

As gold price hovers around Rs 51,000 per 10 grams mark, is the time ripe for fresh buys in gold? Yes, gold price has dropped from its historic high.  However, who should buy gold at these levels – traders or investors? Should the consumer buy gold now? If all these questions are crossing your minds, Zee Business will solve the riddle for you. 

Gold price has come down by almost 10 per cent and that means it is a good time to buy, jeweller Ishu Datwani told Zee Business’ Mrituenjay Kumar Jha. Datwani’s Anmol Jewellers is based out of Mumbai.

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He said that he has been getting customers in good numbers for over a week now and expected things to get better from here. He was responding to question whether the demand for jewellery have gone up as the prices have come down from Rs 56,000 to current levels. The marriage season between December and February next year will create demand. The customers have been coming and this may soon start converting into deals, he said. 

Ravindra Rao of Kotak Securities said that the MCX Gold has come down on the back of a stronger Rupee. He recommended a buy around Rs 50,700- Rs 50,800 with a stop loss at Rs 50,600. The immediate target price is Rs 51,400 and the next target price at Rs 52,400, he said. 

As for traders, there should be no buying and only selling at the current levels, Kunal Shah of Nirmal Bang securities said. He said that there could be some more correction in the prices of gold on MCX. 

He advised against buying because he said that this precious metal has seen a rally of 35 per cent and all positive fundamentals have now been factored in. He said that there has been no retail buying in gold. There would be more correction, going forward. For traders the sentiments are negative in gold and silver so it is advised that they sell, Shah said. 

For investors, it will be difficult to predict timing and the price may spurt up anytime, Rao said. He said that the fundamentals are still intact. The demand was good in July and has come down in August due to correction. An upside trigger would create fresh demand in ETFs, he opined. It is a good opportunity for investors as the prices have corrected between 10 and 12 per cent, he added.

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Consumers should wait as prices may see a further fall, Shah said.