Robust buying of gold during Dhanteras; yellow metal to reach 56,000 levels in year's time: Traders
Oct 23, 2022
New Delhi [India], October 23 : Due to the auspicious timing, Dhanteras is being celebrated on two days which led to an upward trend in the market.
Buyers are not shying away from investing in the strengthening gold on the first day. Experts are saying there is robust buying in the market and expect to reach 56,000 levels in a year's time. They also said a correction in international gold prices had been happening since the aggressive interest rate hikes by the US Federal Reserve and expected buyers to buy the dips.
On Sunday, gold with 24K was trading at Rs 51,290 per 10 gm in the morning, an increase of Rs 10 from yesterday's closing price.
Ajay Kedia, Director, Kedia Advisory, said, "We see gold demand on Dhanteras is likely to be robust as after two years of Covid-19 restrictions. This year has been largely restriction-free and more people are likely to shop this year. There has also been a surge in the number of weddings this year and the jewellery demand has been higher."
He added that while that there could be some volatility in the global market in the near term, arising from the outcome of the US Federal Reserve's meeting early next month where it may hike its interest rate, locally the precious metal was likely to sail through on festive and marriage-buying.
However, the rates of silver were trading flat at Rs 57,700 per 1 kg in Delhi, Chennai and Mumbai on Sunday.
Ajay Kedia said, "Also, a weak rupee is also likely to support gold prices...for Muhurat trading, the global factor is likely to play a factor and market may move sideways to negative, however in a year's time, gold can spike up to Rs 56,000 levels."
On October 22, in India, the 22-carat gold rate gained to Rs 47,000, and the 24-carat gold rate gained to Rs 51,280/10 grams, increasing sharply by Rs 750 - Rs 830, respectively.
On international gold markets, Manoj Kumar Jain, Director, Head of Commodity and Currency Research, Prithvi Finmart, said, "Gold prices corrected around 20 per cent from their highs in the international markets last year due to aggressive interest rate hikes by the US Federal Reserve and gains in the US bond yields. The dollar index is trading at nearly 20-year highs and US 10-year bond yields are at 14-year highs. The USD has also gained against almost all global currencies and has traded at multi-decade highs. Gold prices slipped from around USD 2,085 per troy ounce to USD 1,620 per troy ounce and currently trading around USD 1,655 per troy ounce.
Manoj Kumar Jain said strong dollar and US bond yields have pressured gold prices but geopolitical tensions, higher inflation and higher crude oil prices are supporting gold prices at lower levels.
He said that if the rate hike of the Federal Reserve happens, gold price will soon cross USD 1,700 per troy ounce in the international markets.
Further in his view towards buying the yellow metal, Jain said, "In our view, gold is buy-on-dips markets in the present situation and it will strongly hold USD 1,600 levels in the international markets.
Jain also added that in the domestic markets, weakness of the rupee was supporting gold prices and it would not fall below 49,500 in the near term and that it was expected to test 51000-51600 levels soon. Jain suggested buying gold on every dips between 50400 and 50000 with a stop-loss of 49500 for the upside targets of 51000-51600.
