Spoiler alert! Gold price to reach at Rs 35k-mark - This is when you should buy and sell your yellow metal
Notably, gold demand has been rising since last year, and the first month of 2019 has also shown major positive shifts in this yellow metal.
Notably, gold demand has been rising since last year, and the first month of 2019 has also shown major positive shifts in this yellow metal. In fact, even RBI has hinted that, yellow metal can be a demand as a store of value, in the environment of fixed-income bonds witnessed downward trend. According to GoodReturns.com, the price of gold in 22 karat for 10 gram, was trading at Rs 32,600 above Rs 10. While, 10 gram in 24 karat was trading at Rs 34,200. In the beginning of January 2019, the price of gold metal in 22 karat and 24 karat was slightly above Rs 30,000 and Rs 32,000. This simply indicates that, investors have been buying this commodity at higher level, and such will mean an expensive gold ahead.
Experts talking to Zee Business, pointed out five reason to why gold prices will rise ahead. In fact, they believe gold prices are set to clock Rs 35,000-mark, which brings in cautious note for investors including both short-term and long-term for having a buying sentiment. These pointers are - massive demand in gold, global growth impact on safe haven buying will set course, despite volatility in stock exchanges, investors have boosted this commodity, weak Indian rupee against US dollar and US market.
On Monday, global gold prices have witnessed drop, as investors were cautious due to the risk arising from progress in US-China trade talks. Another, was uptrend in dollar index which kept the bullion under pressure.
Margaret Yang, a market analyst with CMC Markets told CNBC, “The plunge (from Thursday’s peak) came along with fading enthusiastic for safe-havens, as U.S. and China are moving to close a deal and many uncertainties surrounding the U.S. government shutdown, Brexit, Fed policy were cleared last week.”
What will happen to your gold?
Kishore Narne, Head of Research at Motilal Oswal said, "Overall underline term is that, gold prices will be bullish. However, they will first witness a Rs 34,000-mark and will witness price correction and slow down for awhile. But i think in next 4-6 months, gold price will be at Rs 35,000."
AnandRathi and Monarch Capital believes, the Rs 35,000-mark in gold price will come by end of March.
— Zee Business (@ZeeBusiness) February 4, 2019
When should you buy?
Narne said, when the gold price comes between Rs 33,800 to Rs 34,000, some profit booking must be done. Then from there one should wait for dips to make buying.
For long-term investment, expert at Monarch said, "In gold, there have been one-way rally seen in January month, which has led the prices to rise by almost Rs 2,000.When the price in gold gets corrected near Rs 33,000 ahead, then only one should enter in this market.Long term its very bullish, considering the RBI is very active in gold."
“Investment demand in gold is very optimistic.I expect gold to reach at Rs 35,000 by March end. Hence, buy when Rs 33,000 mark is arrived,” adds Monarch.
Last year, surprisingly, RBI made first buying in gold after a decade. During the fiscal FY18, the central bank added 8.46 metric tonnes of gold in its stocks, taking the overall gold reserves to 566.23 metric tonnes. Unlike every other global central bank, RBI is generally not active in gold buying, although it is allowed to do so. The last time, RBI bought gold as reserves was way back in 2009, about 200 metric tonnes from IMF.
This is a clear indication, that even RBI feels that there is demand for gold as store in value.
Decades-after-decades have past, and gold has remained as a store of value investment for investors. Because it is a physical commodity and cannot be printed like paper money, the value of gold is not impacted with interest rate changes by government. Gold is seen as an insurance among investors. They are heavily traded as safe haven investment - which is used as a medium to retain or increase the value of gold during market turbulence.
Now that, gold prices are seen to rise ahead, one would want to make buyings when the yellow metal trades near Rs 33,000 to Rs 34,000. On the other hand, when the price surge to Rs 35,000, as an investor one can decide to book profit.
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