Where is gold price headed? Should you buy or sell or sit on the fence? Check money-making strategy

Where is gold price headed? That question is high on investors agenda. Well, the fall in gold demand is expected to be around 70 per cent in this financial year - highest in 26 years according to estimates. The demand in jewellery has also come down this period. While this precious metal has been trading slightly positive today at Rs 50,800 and the MCX Gold futures are up by around Rs 100 

The demand for gold has not kept up pace with the expectations, Surendra Mehta, Secretary at India Bullion and Jewellers Association Ltd. (IBJA) said. Whatever little demand that has come has been from rural areas and Southern India, where the impact of coronavirus has not been so severe, he said.

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People are not stepping out of their homes and have stayed away from organising events. The festive season is also approaching but the demand has not picked up, Mehta said. He expected the fall to be in excess of 70 per cent for FY 2020-21 (April-March) for spot gold. 

Even a report by World Gold Council (WGC) suggests that the demand fell by 74 per cent in the April-June quarter. 

Mehta, however, said that the investment in gold would continue to rise.  

Zaveri Bazaar-based jeweller Kumar Jain who owns Umedmal Tilokchand Zaveri said that he expected the demand to claw back as the marriage season approaches in November. He said that customers are now preferring to buy gold from one place rather than buying it from several shops because of the pandemic issue. He, however, conceded that the demand has been weak and the jewellers have missed out on important occasions like Ganesh Chaturthi, Rakshabandhan and Independence Day buying. 

Taking a contrarian view from Mehta, Somsundaram PR, Managing Director (MD) at WGC India said he expected the demand to come back in countries like India and China. Even during the lockdown, people bought gold at every opportunity, he said.

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Analyst Jigar Trivedi of Anand Rathi said that Gold Futures would touch 50,500 in today’ session. He responded to a question on whether MCX October Gold will be able to test levels around 51,500. He also advised investors to sell on market rise. He puts the stop loss at Rs 51,100 and target price at 50,700.