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This Dhanteras, gold prices down about ₹3,000 from last year’s levels. Good time to buy? – Mint

After posting stellar gains for the past few years, the yellow metal has been trading range-bound in the past 12 months. Gold had hit a record high of 56,200 in August last year and since then has struggled for gains. So this Dhanteras gold prices are trading at 47,741 per 10 gram on MCX futures market, down from 50,500 levels during Dhanteras last year. 

“Indians’ love for gold knows no bounds, it is the second-largest consumer of gold. In the run-up to the festive and marriage season coupled with unlocking across India, the demand for gold is likely to pick up, helping the price. Gold is seen as a serious investment and asset class by Indian households,” says Nish Bhatt, Founder & CEO, Millwood Kane International.

“Gold outperformed as an asset class in 2020 but lost its sheen as economies across the globe emerged out of the shadows of COVID19. Gold prices are still far away from their all-time high witnessed in August 2020. Concerns of tapering, strengthening US Dollar, and high rate of vaccination have dampened prospects for gold. Going forward, the actions by the global central banks mainly the US Fed on the liquidity tightening will guide gold prices,” he added.

Jewellers expect to see strong demand this festive season. Parag Shah, Director, HK Jewels Pvt Ltd, the retail jewellery arm of the renowned Hari Krishna Group, said “We are seeing a demand growth for gold in tier-2 cities. After two years of challenges, customers want to spend and invest in jewellery. We have booked orders for 33% more gold in October 2021 over October 2020.”

Some analysts say that gold is not expected to see a major rally in the near term. 

“Prices continue to stay firm but unlikely for major rallies in the immediate run. A stronger US currency, optimistic global economic sentiment, and expectations of tapering off stimulus measures by central banks continue to put pressure on safe assets like gold. A steady equity is also influencing the short-term outlook of the commodity. However, a weak Indian rupee and festive season demand would limit major selloffs in domestic prices,” said Hareesh V, Head of Commodity at Geojit Financial Services.

Analysts at Motilal Oswal maintain a positive bias on gold. “We have been bullish and continue to maintain a positive bias for gold price over the next 12 months, and expect that the consolidation is stretched could see some directional move soon. The current scenario could have some short term hiccups which might give investors a better buying opportunity. We believe that gold has a potential to surge towards $2000 once again and might even make a new life time high on the Comex. On the domestic front we expect prices to surge towards highs of Rs.52000-53000 over the next 12 months,” they said in a recent note. 

 

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