In festival gold rush, buy with caution
If you are rushing to buy gold ahead of Akshaya Tritiya, analysts suggest doing so with caution because the recent sentiment-driven price surge of gold is not going to hold for long. Rachit Vats and Anupama Airy report.business Updated: May 12, 2013 00:40 IST
If you are rushing to buy gold ahead of Akshaya Tritiya, which falls on May 13, an auspicious day in the Indian calendar to make gold and silver purchases, analysts suggest doing so with caution because the recent sentiment-driven price surge of gold is not going to hold for long.
"There has been some recovery in gold prices recently but fundamentals don't recommend any further upside in prices," said Naveen Mathur, associate director - commodities and currencies, Angel Broking.
"Overall, we are very bearish about gold prices recovering further."
Gold is currently trading at Rs. 27,400 per 10 gm against Rs. 32,000 in the year-ago period.
Most analysts HT spoke to said investors entering the market now should not expect much return from gold over a short term.
But, they could look at investing with a two-three years horizon in mind.
Jewellers - looking to make money during the Akshaya Tritiya period - are however bullish on gold prices rising further.
"Gold prices will settle back above Rs. 29,000 per 10 gm during the year," said Mehul Choksi, chairman and managing director, Gitanjali Group.
"The demand in India is at least 40% more over the past few days and there are not enough goods in the market. Overall, there will be at least a 30% surge in volume."
MMTC, India's largest gold and silver supplier, is aiming to more than double its gold and silver jewellery sales to Rs. 30 crore during its five-day exhibition organised in the Capital to mark Akshaya Tritiya.
"Due to a significant fall in gold prices, we expect total sales during Akshaya Tritiya festival to touch Rs. 30 crore," a senior MMTC official said on the sidelines of the launch of exhibition of gold jewellery.
MMTC clocked a sale of Rs. 14 crore during Akshaya Tritiya festival last year.