Gold prices near ₹72,000 per 10 grams now: Should you buy amid the recent rate drop?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Gold prices inched marginally higher on Wednesday (April 24). On the Multi Commodity Exchange (MCX), gold futures for June expiry showed a modest uptick of 0.15% per 10 grams. According to Goodsreturn data, the price of 22 karat gold rose by ₹45 to ₹6,660 per gram, while 24 karat (999 gold) pure gold stood at ₹7,216 per gram.

The slight gain comes on the heels of a downward trajectory observed in the yellow metal for the past two days.

Tuesday saw gold prices hitting a more than two-week low as diminishing fears about escalated tensions in the Middle East prompted investors to book profits.

Internationally, gold prices also experienced a modest uptick on Wednesday but remained ensnared within a narrow range.

Spot gold rose by 0.2% to $2,327.86 per ounce by 0429 GMT after having hit its lowest since April 5 in the previous session, as per Reuters.

US gold futures remained steady at $2,340.90.

Reasons for fluctuation

The recent fluctuations in gold prices are attributed to investor caution amidst uncertainty surrounding US economic data and the Federal Reserve’s interest rate trajectory.

Analysts suggest that the false break of $2,300 on Tuesday indicates a continuation of gold prices being range-bound in the near term, awaiting clarity from upcoming US inflation data and the BOJ meeting, according to news agency Reuters.

The outlook and investment strategy

Despite the recent downturn, experts remain optimistic about gold’s trajectory.

According to Riya Singh, Research Analyst at Emkay Global Financial Services, the bullish trend of gold is expected to persist, underpinned by continued central bank buying, especially from Asian and other emerging markets.

Singh emphasised that considering indicators like relative strength indexes (RSIs) is crucial, as periods of consolidation or correction are inevitable after overbought conditions.

Additionally, speculation arises regarding potential interventions by Japan to support the weakening yen, inadvertently supporting gold’s resurgence by denting the strength of the US dollar.

Motilal Oswal is also optimistic about the gold bull market, foreseeing support from a weaker dollar, a fall in yields, and a sustained rise in hedging demand linked to rising economic and geopolitical risk.

The firm noted a significant increase in net long positions in gold.

Motilal advised investors to consider strategic allocation to gold in portfolios, emphasising its role as a safe-haven asset amidst economic uncertainty and geopolitical tensions.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow