Gold prices may hit below ₹50,000 level. Should you invest or wait?
Experts say the price of 10 gram of gold can fall below ₹50,000 and that of one kilogram of silver can come down to ₹60,000 tracking the international market.
Gold and silver prices have fallen drastically this week after showing a steady rise during the ongoing coronavirus pandemic. The price of gold slid after reaching a peak of ₹56,000 per 10 gram the week before.
Compared with the gold price on August 7, the rate of the yellow metal has fallen by ₹3,252 between August 10 and August 14. At the same time, one kilogram of silver has fallen to ₹7,245 this week after reaching a peak of ₹75,013.
Experts, according to HT’s sister publication Hindustan, believe that the price of 10 gram of gold can fall below ₹50,000 and that of one kilogram of silver can come down to ₹60,000 tracking the international market. They say Russia’s announcement about the development of a safe vaccine against the coronavirus disease (Covid-19) has boosted confidence in the stock market and has led to profit-booking in gold and silver, bringing their prices down sharply.
Gold prices are sliding in the international market as well. The US gold futures have fallen by 2.8% to $1,892 an ounce and silver at $23.96 per ounce. Gold may once again touch the level of $1,700 an ounce in the global market, according to experts.
Other than Russia’s Covid-19 vaccine announcement, a strengthening gold index has been another reason for the decrease in gold and silver prices. A buzz about another economic package in countries, including India and the US, has also increased the pressure on gold and silver prices. Investors’ trust in the stock markets around the world has increased, which has, in turn, reduced their inclination towards the precious metal.
According to experts cited by Hindustan, those planning to buy gold should wait for now because, after the continuous rise in gold, a selling trend can come in. The price of gold can go back below ₹50,000 per 10 gram and, at the same time, silver prices can reach ₹60,000 for a kilo again.
JP Morgan has said in a report that gold can reach beyond ₹70,000 in the next two years and experts say the global economic crisis is not going to end immediately even after the end of the coronavirus pandemic. In such a situation, amid the turmoil in the economy, the demand for gold is expected to continue further. And, the demand for gold is expected to continue and rise further.
On Friday, October gold futures on the Multi Commodity Exchange (MCX) fell 0.8% to ₹52,495 per 10 gram while September silver futures dropped 3% to ₹68,886 per kg.