The price of gold is expected to hover around Rs 38,000 per 10gm on the Dhanteras and Diwali week.
On Wednesday, gold futures were trading at Rs 38,044 per 10 gm on MCX. Prices were muted in the global markets, too, with spot gold inching up just 0.1% to $1,489.07 per ounce.
Gold prices in India have surged 20% this year and had hit a high of Rs 40,000 per 10 gm last month. But they have fallen more than Rs 2,000 from that level and, in fact, slipped below Rs 38,000 on Tuesday. “Prices at the domestic market slipped below Rs 38,000 and tested its crucial support of Rs 37,880. We expect gold prices to remain in pressure as US-China trade talk is in a good direction,” Manoj Kumar Jain, director at IndiaNivesh Commodities, Moneycontrol quoted Jain as saying.
Analysts say this slight blip in gold prices may lure buyers ahead of the festive and wedding season. “We believe that this correction gives good opportunity to enter as overall prices look bullish after Diwali for potential upside towards Rs 39,000 in the near term,” Jateen Trivedi of LKP Securities told a media house, adding that he expected domestic to keep floating near Rs 38,000 in the immediate near term.
However, on the flip side, any unexpected or sudden increase in gold prices may also hit demand adversely. Singapore dealer GoldSilver Central’s managing director, Brian Lan, told Reuters that demand could be tempered during that period (Dhanteras and Diwali) if prices remain very high.
But that looks unlikely as gold prices internationally have remained rangebound of late, with the effect of the uncertainty over the Brexit deal being negated by positive trade talks between US and China. Hence, domestic buyers seem to have a wide window of time to buy gold at the current levels.