Diwali is considered to be an auspicious occasion to buy gold and regardless of price, Indians buy gold. Analysts believe that investment demand will continue to rise in 2021 given the unprecedented amount of liquidity from central banks around the world. Rising covid infections also add the icing to the cake for global investors to increase their allocations towards the yellow metal. “Although the physical demand figures published by the WGC do not represent a good story for India, it is advisable to increase the gold allocation across its entire portfolio from 10% to 15% taking into account the uncertainty surrounding the global economy. “says a report by Angel Broking.
As seen in MCX Gold’s annual price chart, we noticed that prices have moved almost 30% up in 2020. By 2020 prices had reached a high of 56,191 levels and a low of 38,400 levels. . The long-term trend for gold is positive. Prices have formed an “upper upper and upper lower formation”, which is a sign of an uptrend.
India’s gold demand in 2020 at 26-year low, investment demand continues to rise
According to the World Gold Council, India’s demand for gold is expected to fall to the lowest level in 26 years with domestic bullion prices hitting a record high and falling disposable income could further reduce retail purchases. “India’s gold consumption in the first half of 2020 plummeted 56% year-on-year to 165.6 tonnes. Meanwhile, the coronavirus lockdown also reduced demand by 70% in the June quarter to 63 , 7 tons, the lowest in more than a decade. ” says Angel Broking.
On the other hand, the global pandemic continues to affect the economy, which in turn is negatively affecting consumer demand for jewelry and technology. On the other hand, investment demand, mainly through gold ETFs, remains strong.
“Gold ETFs have added more than 1,000 tonnes for the first time, surpassing the record of 646 tonnes in 2009. North American funds account for almost 2/3 of the world’s net inflows for the year. It clearly says that the fundamental support for demand for investment in gold It is unlikely to change, regardless of any global uncertainty. So far, monetary policy is easy, gold will continue to shine, “says the report.
What is the good level to buy gold?
Analysts at Angel Broking expect gold prices to find support at the levels of 47,500 – 44,000 ($ 1800 – $ 1680). “Resistance is now seen in the range of 55700-56500 ($ 2100) levels. Trading consistently above 56,500 levels would lead to strong resistance at 62,500 ($ 2300) levels, and finally towards main resistance at levels of 67,000 ($ 2,500) “. the report says.
Looking towards a positive chart structure and technical indicators suggesting consolidation, Angel Broking recommends buying on dips in gold.
“Buy MCX Gold between 45,500 and 44,500, SL – 41000, Target – 55,700 / 56,500,” says Angel Broking.
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