Akshaya Tritiya: What Anand Rathi suggests for Gold buying on Akha Teej - Check target price

Anand Rathi said that in Sanskrit, the word “Akshaya” means “never ending” in the sense of “prosperity, hope, joy, positivity, health, wealth & success”; and Tritiya means “third phase of the moon”. This festival is majorly observed by Hindus and Jains. Akshaya Tritiya, also known as “Akha Teej”, is considered highly auspicious in many regions of India for new ventures, marriages and expensive investments like house & gold. Akshaya Tritiya is synonymous with good luck and success. There is a tradition of buying gold on this day as it is believed that buying the yellow metal on this occasion brings prosperity and more wealth in one’s life. It is also believed that gold, purchased on this day, will never diminish and would continue to grow or appreciate.

This year Akshaya Tritiya is falling tomorrow, that is 14th May, 2021. For those who are planning to buy gold for long term investment, there is good news. Gold on the MCX for June contract fell by Rs. 161 and closed at Rs. 47,472 / 10gm. This is a good opportunity to buy gold as the long term fundamental story is well in tack. In the short term gold may dip due to rebound in the US dollar, but mid-term and long terms outlook is still bullish. Hence it is best to keep accumulating gold on every dip. Anand Rathi expects the yellow metal to touch Rs. 50,000 / 10 gm. and Rs. 52,000 / 10 gm. this year. From a fundamental point of view, rising inflation should be favorable for the yellow metal, implying investment demand for gold will likely increase in the coming months.

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Anand Rathi says that Investors need to cautiously watch the dollar since overall trajectory is downward, higher US treasury Yields, exchange-traded fund (ETF) demand picking up and falling global interest rates. Rising coronavirus cases especially, in India, Japan & Indonesia, continuous liquidity support by the central banks of the world, rising inflationary expectations, economies growing on the back of debt, Middle East geo-political risk, trade wars between Australia/EU/US and China, and a few other factors continue to boost the sentiment and build a strong case for higher gold prices.

Tricky part is Covid-19 related lockdown restrictions in India as many parts of the country have imposed strict lockdowns and free movement is under severe punishment. The so-called millennial generation might find other avenues of buying gold more attractive than a traditional one, for example buying a Sovereign Gold Bond, Digital Gold, ETF or MCX BullDex, explains Anand Rathi.

Overall, this Akshaya Tritiya, is a good time to go long in gold since prices have corrected recently; having said this, the long term picture is still looking bullish for the yellow metal. Anand Rathi reiterates target price for gold around 50,000 / 10gm and 52,000 / 10 gm  for this year and recommends accumulating on every dip. On the flip side, Rs. 45,000 / 10gm. is a strong support.