The recent fall has brought gold prices down ₹49,500 per 10 grams compared to all-time highs of ₹56,200, struck on August 7. Silver has also suffered a big drop. The while the metal has fallen below ₹58,000 per kg compared to last month’s high of about ₹80,000. A rally in the US dollar has been attributed to the current leg of the decline in precious metals.
The recent price drop has caused a slight rebound in retail demand in India, Reuters reported, citing a distributor.
After the price drop, some analysts say investors may look to buy gold in tranches for better entry levels.
“Many are expecting a drop in gold and silver prices in the last few days after the recent spike. Gold has corrected from highs of 57,000 to the current price of 49,500, while silver has corrected from 78,000 to 58,000, “said Navneet Damani, vice president of commodity research at Motilal Oswal Financial Services.
“Both metals still look very attractive given the macro context and other fundamentals that support them. Gold is stable while silver is volatile, so choose what you want to invest in,” he said.
“One can look to buy gold on dips towards Rs. 47500-48000 with targets up towards Rs. 65000-67000 for the next 18 months. Similarly for silver, look to add between 55000-58000 with a potential target towards 80000- 88,000 more in the next 18 months, “he added.
In global markets, spot gold prices today traded around $ 1,860 an ounce after a sharp correction last week.
Hareesh V, head of commodities research at Geojit Financial Services, said rising tensions between the United States and China and hopes for further economic stimulus measures may continue to provide a lower level of support for gold.
“A rally in the US dollar and optimism about the Covid vaccine are weighing on the demand for gold as a safe haven and thus on the price of the commodity. At the same time, however, uncertainty in the metal prevails. before the first presidential election debate in the United States this week, “he added.
“Weak sentiments continue to push prices (London spot gold) down towards the $ 1840 support and is likely to trigger a rebound. An unexpected drop below $ 1820 would extend the selling pressure later on,” he said.
HDFC Securities in a note said that October gold prices have short-term resistance at Rs. 51000 for 10 grams and stand at Rs. 48600 for 10 grams.
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