Gold rate today jumps after SVB First Citizens Bank deal. Experts give buy tag with ₹68,000 target for long term

Gold rate today: On account of ease in bank crisis in US, gold price today surged in early morning deals. Gold future contract for April 2023 on Multi Commodity Exchange (MCX) opened with an upside gap at ₹58,718 per 10 gm levels and went on to hit intraday high of ₹58,742 per 10 gm. Gold price in international market opened flat but soon gathered momentum and hit intraday high of $1,964 per ounce levels.

Silver rate today has also caught bulls' attention in morning deals. The white metal contract for May 2023 futures on MCX opened upside and hit intraday high of ₹70,190 per kg levels. In international market, silver price is sustaining above $23 per ounce levels despite some sell off pressure.

Speaking on reason for rise in gold, silver price today, market expert Sugandha Sachdeva said, "Gold has found it tough to sustain above the crucial barrier of $2,000 per ounce and Rs.60000 per 10 gm mark which has given way to selling pressure setting in prices. The recent banking sector turmoil in the US and Europe had led investors to rush toward the safety of gold, boosting prices toward record highs in the domestic markets."

SVB First Citizens Bank deal in focus

Asked about the SVB deal impact on gold price in near term, Sugandha Sachdeva said, "The easing of stress in the banking sector has revived risk sentiments in the markets leading to decreased demand for safe-haven gold. The news that US lender First Citizens Bancshares Inc has taken over the stricken US Silicon Valley Bank's assets has assuaged some of the investors’ fears about a deeper crisis. The near-term outlook suggests some more pressure in gold towards the level of Rs.58000 per 10 gm."

Expecting bounce back after profit booking, Nirpendra Yadav, Senior Commodity Research Analyst at Swastika Investmart said, "The US authorities' expansion of emergency lending facilities and the sign of stability in the banking system kept profit booking in precious metals yesterday. However, increasing gold import in top consumer China and, persisting fear of recession in the US economy pent up the demand for safe haven. Gold prices are likely to be range bound ahead of US CB Consumer Confidence data, which is in focus today amid banking turmoil."

On near term outlook for gold and silver metals, Sugandha Sachdeva said, "The near-term outlook suggests some more pressure in gold towards the level of ₹58,000 per 10gm. Furthermore, silver prices have also not been able to close above the key resistance of $23.50 per ounce or ₹70,500 per kg on a weekly basis, which can lead to some corrective moves in the near term. Support for silver is pegged at $22 per ounce or ₹68,000 per kg mark."

₹68,000 per 10 gm target in sight

Advising long term investors to cash on the near term dip in gold prices, ICICI direct report says, "The structural up trend in gold prices remain intact as it is seen resolving past its lifetime highs of September 2020 ( ₹56,018). The prices in the process have generated a breakout above the last two year’s broader consolidation ( ₹56,000 to ₹44,000 per 10 gm) signalling extension of the up move."

The brokerage went on to add that international gold prices are also in secular up trend citing, "Historically, we have observed over the past five decades, larger uptrends in international gold prices have lasted usually for four to five years. In the current context, we are in middle of the current uptrend. We expect markets to maintain the rhythm and continue uptrend for another couple of years."

On suggestion to long term investors in regard to gold prices, ICICI direct said, "The robust price structure on long term charts makes us believe prices have significant upsides towards ₹68,000 levels over two to three years being the confluence of the last two year’s broad range breakout ( ₹56,000 to ₹44,000) and also the value of the rising supply line joining major yearly high of CY12 & CY20. Hence, investors should continue investing to benefit from multiyear uptrend."

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.