This year, buying the yellow metal on Friday’s Akshaya Tritiya may help grow your wealth faster, as analysts believe the yellow metal is all set to climb its all-time high.
Jitters caused by rising bond yields and Covid uncertainties across have the potential to push gold prices to the peak levels last seen in August last year, when the bullion had hit all-time highs.
“Rising Coronavirus cases, continuous liquidity injections, rising inflationary expectations and economies growing on debt support, all continue to boost sentiment and build a strong case for higher gold prices,” said analysts at Motilal Oswal.
In the international market, prices have consolidated over the past few months and recently generated momentum to come back to around $1,800 level on the COMEX. Analysts say there is comfort in gold buying from a short- to medium-term perspective to target new highs of $2,050-$2,200 levels.
In the domestic market, after hitting a two-week low of Rs 46,462,
gold has seen a reversal to currently trade around Rs 47,560. In the spot market, the highest purity gold is selling at Rs 47,807, a level seen in the February first week.
“On the domestic front, the post-Budget gold price is a good level to enter for an immediate target of Rs 50,000 and eventually a new high of Rs 56,500 over the next 12-15 months,” said Motilal Oswal.
Should the yellow metal hit those level, it would mean up to 18 per cent gains from current level. Traders who want to take fresh positions in gold derivatives can buy now for short-term gains.
“Akshaya Tritiya is considered an auspicious day to buy gold. Usually, we see some buying demand ahead of it, and also on that particular day. MCX gold price continues to exhibit strength after a big blowout in the US non-farm payrolls data,” said Rahul Gupta, Head of Currency Research at
.
“The Immediate resistance is at Rs 48,250 and then Rs 48,360. So consistent trading above Rs 48,400 will open the doors for Rs 49,000-49,700 levels. Support is seen at Rs 47,330-47,000-46,500 levels,” he said.
Analysts also outline certain risks to their projections, which include a falling dollar and higher US treasury yields, which can lead to outflow of money from non-yielding bullion.
How to buy gold?
Most jewellery shops are now closed due to Covid-19 restrictions and that could be the major problem in buying physical gold. But, digital gold and gold ETFs can be good options to bet on the yellow metal.
“Historically, the common way to save in gold has been to buy physical gold in the form of coins, bars and jewellery. But during this pandemic, the method gaining popularity is saving in digital gold,” said Ketan Kothari, Director of Augmont, a platform that provides such a facility.
Augmont claims to have sold around 10 kg of digital gold on Akshaya Tritiya in 2020.
Gold ETFs continue to receive steady inflows from investors, as more and more them are realizing the need to add gold in the portfolio as a diversifier. In April, the category saw a net inflow of Rs 680.15 crore, higher than March’s total inflow of Rs 662.45 crore. From January 2020 to April 2021, this category received a net inflow of Rs 9,089.63 crore.
