No price spike likely this Akshaya Tritiya

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Kolkata: Gold prices may not rise sharply this Akshaya Tritiya despite a spike in geopolitical tensions. Bankers and analysts reckon that the market has already factored in the consequences of an US-led missile attack against Syria last Saturday itself. Gold prices are likely to remain range bound and hover around the Rs 31,000-31,500 per 10 gm-mark on April 18, when Indians celebrate Akshay Tritiya, an auspicious day to buy gold.

Talking to ET, Sekhar Bhandari, business head for global transaction (banking and precious metals) at Kotak Mahindra Bank, said: “I feel that the current geopolitical tension will have minimal impact on gold prices. Unless it escalates in a big way, gold prices will witness a rally and will have a safe haven status. Temporarily, prices may spike for a day or two, but that may not sustain for long. Indian customers are also watching the movement of gold and are very cautious before they invest in it.”

Gold prices were little changed in Asian trade on Monday. Spot gold was down 0.1 per cent at $1,344.03 an ounce, while the US gold futures eased 0.1 per cent to $1,346.80 an ounce.

Russia responded angrily to the US-led strike against Syria, warning of unspecified consequences. “One has to see how both countries behave. In the short term, a consistent spike in gold is not expected. At least, in the next 40 days, we do not see a huge rally. In fact, today’s gold movement is an indication of that,” said Bhargav Vaidya, a gold trade analyst.

Gnanasekar Thiagarajan, director at Commtrendz Research, said prices of gold will increase this year. “A volatile stock market and inflationary pressure will push up gold prices this year,” he said.

Investment demand in the form of gold coins and bars also may not see much response this year, trade sources said. Analysts said that sovereign gold bond, which has been launched on Monday, is expected to do better this Akshay Tritiya.

The sovereign gold bond 2018-19, series-I, will be sold through banks, Stock Holding Corporation of India Limited (SHCIL), designated post offices and recognised stock exchanges — NSE and BSE.

The bond will be accepted from April 16 to 20, 2018. Under the scheme, the bonds are denominated in units of one gram of gold and multiples thereof. Minimum investment in bonds is one gram with a maximum limit of subscription of 500 grams per person per fiscal year (April-March).

Source: Economic Times