Gold Price Today: Yellow metal slips as investors eye Fed May outcome; analysts recommend buy for medium-term
Any rate hike by the US Federal Reserve is expected to strengthen the dollar and reduce the yellow metal’s safe-haven appeal.
The dollar index on Thursday was seen inching towards the 102 mark against a basket of six major currencies.
Against this backdrop, MCX June gold futures shed Rs 93 or 0.15% to trade at Rs 60,195 per 10 grams while silver futures declined by Rs 179 or 0.24% to Rs 75,293 per kg.
The June gold futures ended at Rs 60,296 per 10 grams on Wednesday, down Rs 192 or 0.32%. The prices slipped below the Rs 60,000 mark intraday before settling above the psychologically important level. Meanwhile, May silver futures closed at Rs 75,520, higher by Rs 271 or 0.36%.
“The weakness persisted in gold prices, as on Wednesday gold slipped over half a per cent concluding at 1993.3$ per ounce on the dollar strength. Investors are worried about future interest rate hikes by top central banks to combat inflationary pressures. We expect gold to trade lower towards Rs 59,840 levels, a break of which could prompt the price to move lower to Rs 59,520 levels,” Prathamesh Mallya, Assistant Vice President – Research, Non-Agri Commodities, and Currencies at Angel One said.
On the Comex, gold futures were trading at $2,005.20 per troy ounce, down $2.10 or 0.10% while silver futures were at $25.295 per troy ounce, down $0.076 or 0.30%. In view of the upcoming festival of Akshaya Tritiya, most experts told ETMarkets that investors can look to buy gold as the medium-to-long-term outlook remains strong.
“Indians prefer buying gold on Akshaya Tritiya’s auspicious occasion. The buying on this day is considered a long-term investment, although the prices lately have been hitting the roof but investors should still consider accumulating gold since the peak of the roof seems to be rising high,” analyst Mahendra Luniya, Chairperson of Vighnaharta Gold said.
Saumil Gandhi, Senior Analyst-Commodities at HDFC Securities sees a further upside in gold despite the gains it has made over the past year. He believes gold could continue its outperformance over other asset classes under the current circumstances.
Gandhi recommends buying gold this Akshaya Tritiya calling it “a highly valuable and safe haven asset”. If we look at the performance of gold over the last five years during Akshay Tritiya, the average return earned by the investors is 13%, the HDFC Securities expert said.
“Generally we see a demand for physical gold go up to 35 to 50 tons around Akshaya Tritya. This year too, we expect a strong buying trend as we have noticed a trend where people look to buy Gold when the prices are going up, expecting a further uptick,” Anuj Gupta, Vice President (VP), Commodity and Currency Research at IIFL Securities opined.
Gold has given returns of 20% between last Akshaya Tritiya and now, Gupta said, adding that the year-to-date gains have been 9.68% in gold and 8.73% in silver.
Gold could test Rs 63,000 to Rs 65,000 per 10 grams on MCX while Silver futures are expected to make a new record high of Rs 78,000-80,000 per kg by the end of 2023, he added.
Intraday Trading Strategy by Anuj Gupta
While spelling out the day’s trading strategy, Gupta advised investors with a near-term view to remain on the buying side. Correction is an opportunity to invest in bullion, he said. He sees gold prices hitting the Rs 62,000 mark in April.
- Buy MCX June Gold futures at Rs 60,000 with a stop loss of Rs 59,750 and price target of Rs 60,500.
- Buy MCX May Silver futures at Rs 75,000 with a stop loss of Rs 74,350 and price target of Rs 76,000.