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This brokerage advises investors to buy gold in SIP mode during every dip
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Summary
The recommendation comes against the backdrop of rising gold rates, with the precious metal witnessing gains of approximately 15% in domestic bourses in 2023. On Friday (May 10), Akshaya Tritiya day, gold prices increased, fuelled by weak US jobs data and a falling dollar.
As gold prices continue their upward trajectory, Religare Broking suggested that investors could seize the opportunity to accumulate gold through systematic investment plans (SIPs), particularly during market dips.
The brokerage advised investors to consider initiating SIPs as long as gold prices maintain above ₹68,500 per 10 grams.
Religare has set an initial upside target of ₹74,000 per 10 grams, followed by ₹78,000 per 10 grams levels. However, the brokerage warns that a decisive break below the previous swing low of ₹65,200 per 10 grams could disrupt the trend.
“This could potentially lead gold to retest the range of ₹63,300 to ₹63,800 per 10 grams,” Religare Brokerage said.
The recommendation comes against the backdrop of rising gold rates, with the precious metal seeing gains of approximately 15% in domestic bourses in 2023. The market dynamics driving this surge include a blend of geopolitical tensions, central bank manoeuvres, fluctuations in the dollar index, and shifts in US yields.
MCX gold surged by 12.50% in the past calendar year, slightly outpacing spot Comex gold, which stood at 12.20%.
Notably, central banks worldwide have increased their gold purchases, acquiring 1,037 tonnes in 2023, falling just shy of the record set in 2022, which stood at 1,082 tonnes.
Religare Broking pointed out that following a robust performance last year, gold has registered an approximate 12.50% gain on domestic exchanges thus far. Analysing the daily chart, prices are currently consolidating after a sharp rise, with ₹70,000 per 10 grams acting as a pivotal level.
Although buyers are cautious during this consolidation phase, Religare Broking has suggested that a slight dip towards the 50 SMA at ₹68,500 per 10 grams could present a favourable buying opportunity for the next leg of upward momentum.
On May 10 (Friday), Akshaya Tritiya day, gold prices increased, fuelled by weak US jobs data and a falling dollar. At the MCX, prices soared over ₹1,000 to reach ₹72,700 per 10 grams.
This surge follows a ₹2,700 per 10 grams rise within a week.
Comex Gold saw a rise of more than $28 at $2,375 per ounce, marking a strong move of $75 per ounce in one week, according to Jateen Trivedi, VP Research Analyst — Commodity and Currency at LKP Securities.
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