Gold prices in India hit the lowest in the last five months moons at the starting of this week. The yellow metal price fluttered around Rs 46,000-46,500-range, almost Rs 10,000 down from the all-time throughout the week. The drop was due to advanced US employment data and a stronger US dollar, according to analysts. Spot gold prices have dropped by around Rs 2,100 in this month so far. Is it the right time to invest in the safe-haven asset? Know what analysts suggest “The US Dollar could continue to remain firm in the short run as investors will move to the safe-haven appeal of the greenback amid rising Covid-19 delta variant infections. So, we could witness some more correction in the short run,” opined Sriram Iyer, senior research analyst at Reliance Securities.
For those who are scheming to invest in the precious metal, he suggested, “In the longer we still feel there could be one more leg up for gold and investors looking for returns in the longer-term horizon can enter at current levels and keep buying at any dips.” The gold demand in the country increased by 19.2 percent to 76.1 tonne during the April-June quarter this year, largely due to the low base effect, according to a report by the World Gold Council (WGC). In value terms, India’s gold demand witnessed 23 percent growth during the April-June quarter at Rs 32,810 crore. Gold Investment demand in value terms went up by 10 percent at Rs 9,060 crore during the quarter under review. On the future outlook of gold, Sriram Iyer said, “On the domestic side, initially Rs 45,500-45,00 for 10 grams will be key, and a break below will pull prices to Rs 44,000 for 10 grams. However, if prices do take support at the lower levels, we could price move higher towards Rs 50,000 by the end of the year.”
The Reserve Bank of India purchased a record 29 tonnes of gold, as part of its forex reserves, in the first half of the calendar year 2021, according to a report. “This is a great time for investors to either begin or build on their existing gold investment. Gold remains a safe haven to invest in for avid investors and central banks across the globe. Recent media reports also pegged RBI’s gold reserve at over 700 tonnes, up 27% in the last two years. They can choose from traditional units like gold coins, and bars, or opt for dynamic products like Digital Gold, which has grown significantly in the last year,” said Vikas Singh, managing director and chief executive officer, MMTC-PAMP.