New Delhi: Gold
The Economic Times citing analysts mentioned in a report that as long as gold holds above the central technical pivot of Rs 47,500, chances of re-testing the seven-month low of Rs 46,611 hit on commodity bourse MCX looks unlikely. As of 11:28 am, Gold on MCX traded 0.23% higher at Rs 48,072 per 10 grams.
Analysts recommend buying gold ETFs or sovereign gold bonds to cash in on an anticipated Rs 1,000-plus movement in the short term from the current levels.
“So long as gold holds above the weekly central pivot of Rs 47,568, it could test Rs 49,000-plus levels this month itself,” the business daily quoted Vishal Wagh, research head at Bonanza Portfolio as saying.
After touching a record high of Rs 56,191 per 10 gram on August 7 last year, the yellow metal has underperformed most other asset classes. It fell to Rs 46,611 on February 4 due to a global selloff and partly due to the Budget proposal to cut import duty from 12.5% to 10%, inclusive of an Agri cess.
Analysts say the correction in gold was because of funds flow into global equities as economies across the world started recovering after the Covid blow.
However, technical analyst Rajesh Palviya of Axis Securities cautioned that there could be a trend reversal if the yellow metal tests levels of Rs 47,500 again.
The publication quoted as saying Sriram Iyer, senior research analyst at Reliance Securities, “decisive” break of key resistance at Rs 48,500 could enable the metal to retest the Rs 50,000 mark. “For now at least, the worst seems behind us,” said Iyer.
Analysts say the best way to invest in gold for retail investors is either through gold ETFs like Nippon GoldGoldGold
SGBs is a better option than ETFs as the former gives interest at the rate of 2.5% annually on the value of investment. This compares favourably against a good expense ratio of 0.5-0.75% on ETF. However, unlike in ETFs, the SGB has a minimum lock-in of five years. Although the bonds are traded on the NSE, the liquidity is very low.
According to RBI data, the quantity of outstanding SGBs is at 58.86 tonnes.