Gold Price: Ventura Securities highlights all that buyers need to know

MCX derivatives provide an opportunity to hold GOLD in electronic format or remat to physical delivery. E-Gold Investment and SGB (Sovereign Gold Bond) – GOLD FUND – ETF provides a good opportunity to investors who wish to invest in gold. Ventura Securities highlights fundamental view on gold with the upside and downside risks involved. Lastly, for traders, technical view (short term, medium term and long term) gives them an indication of the range they should be looking out for.
 
E-Gold Investment:

Increase in price per ounce of gold in the US - The gold had reached the all time high of $1900 per ounce in mid 2012. After that gold continued its down run till 2016. But now after a long time the gold has outperformed other asset classes. In the month of August, the price of gold had reached all time high of almost $2000. In the last one year the shiny metal has given 25% return.

Currency Effects - In the last one year the Rupee has depreciated by 3.5% as compared to the US dollar. This depreciation in the rupee has propelled the price of gold in the Indian market.

Demand for Gold - Since the pandemic effect, the demand for gold jewellery has dropped significantly but it has been replaced with demand for E- gold, gold coins and bars. And seeing this continuous surge in the price of gold, the trend is there for definitely a good amount of time.

SGB (Sovereign Gold Bond) – GOLD FUND – ETF:
 
GOI (Government of India) launched the (SGB) scheme in 2015, primarily to limit the import of this precious metal. Since then, it has continued to launch different tranches of this scheme at regular intervals. As compared to investing in physical gold and other popular investment options, SGB is known to offer a host of valuable benefits.
 
Gold View (Fundamental)
 
There's normally an inverse relationship between the value of the dollar and Gold prices. Going forward, the next move in the Dollar index would be the game changer. Any appreciation/depreciation of INR may impact MCX Gold price.
 
Upside triggers:

A second Stimulus package (Negative for the Dollar index and positive for Gold)
Global Economic Slowdown (Deeper recession and slower recovery for the virus-affected world economy)

Downside triggers:

A second Lockdown in the European region will be positive for the Dollar Index & negative for Gold price
Covid-19 Vaccine
Geo political tensions may reduce between China & US may impact the Gold price
 
Gold View (Technical):
 
Short term view:  Sideways (Rs 49000 to Rs 52500)
 
Technically, MCX Gold price Dec is trading in sideways movement over the past three month’s period and expected to break out on either side in the coming days
 
Medium term view: 

If it breaks below Rs 49200 one can expect the price might drag down towards Rs 47800 levels first (200 days moving average) after which Rs 45500 will act as strong support for the medium term. On the other hand, if it breaks above resistance levels Rs 52500 levels can expect price levels towards Rs 55000 to Rs 56000 levels over next three to six months period
 
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Long term view:

Ventura Securities expects the next leg of the rally would start once it breaks above Rs 53000 levels and on the upside, it will face an immediate resistance at Rs 56200 levels after that price could move towards Rs 63000 to Rs 65000 over the next one to two years period. On the flip side of breaking the support levels it might drag down towards Rs 44200 levels.