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Gold price today hit 6-month low on MCX (Multi Commodity Exchange) after hitting 45,900 per 10 gm in Monday's early deals and the slide in the yellow metal can be attributed to to the strong US Dollar (USD) in the Forex market as per commodity experts. However, they believe that dollar's strong momentum won't last long as rising crude oil prices may lead to rise in global inflation, pushing demand for gold in the commodity market. 

Experts also said that geopolitical tension in Afghanistan and South China Sea may also help the precious bullion metal to emerge as 'investors' haven' in medium term. Experts advised that gold investors should look at this dip as 'golden opportunity to buy' the metal as prices may go up to 52,000 by Diwali.

Highlighting the reason for gold price tumble and triggers that may lead to trend reversal in yellow metal price; Anuj Gupta, Vice President — Commodity & Currency research at IIFL Securities said, "Gold price has fallen due the US Dollar gaining strength in the international market. But, this won't last long as crude oil prices are surging in the global commodity market, which may fuel global inflation. In such a scenario, gold may emerge as investors' haven again. Apart from this, fast approaching festival season in India and rising geopolitical tension in Afghanistan and South China Sea may further boost the demand for the precious bullion metal."

Echoing with Anuj Gupta's views; Abhishek Chauhan, Head Commodity and Currency, Swastika Investmart Ltd said, "Festival and marriage seasons are likely to come to create demand for gold in India. Even central banks like Russia, China, and other banks are adding gold to their reserves, which may keep the demand for gold intact. ETF buyers are also adding the gold as a hedge against inflation. Gold price at current levels is very attractive for mid to long-term buyers. As equity markets are at very high levels and any correction in the markets may create more demand for safe-haven assets like gold, which may help silver to gain in this momentum."

Speaking on gold price target for medium-term; Anuj Gupta of IIFL Securities said, "Gold has strong support at 45,200 per 10 gm at MCX and one should start accumulating at 45,500 to 45,200 per 10 gm levels maintaining stop loss at 44,600 per 10 gm mark. Due to rising crude oil prices, dovish Fed stance on key interest rates and rise in global inflation; gold price is expected to go up to 50,000 by Diwali 2021." 

Anuj Gupta of IIFL Securities advised gold investors to wait for few more correction as gold price today is 45,900 on MCX and it may further come down by 400 to 500 per 10 gm in next few trade sessions.

Abhishek Chauhan of swastika Investmart said that gold price in international market is currently trading in $1700 to $1790 per ounce range, which may go up to R$1850 and then $1900 per ounce mark in medium term. He said that gold price may go up to 52,000 per 10 gm at MCX by this Diwali if there is no change in Fed stance on key interest rates in upcoming Fed meeting.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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