Dhanteras 2020 Gold buying: Worried about gold prices? See buying tips here; Also know expert MCX trading strategy

Dhanteras is just a couple of days away and the preparations have already begun to observe this day in style  ahead of Diwali. In India there is a tradition of buying gold and silver in some form on this day. The demand for physical gold and silver may see a rise over the next few days. What should the buyers do? Are there schemes that they can avail of to neutralise impact of price rise? Intraday trading strategy from the expert and much more! 

Investment theme has always been the primary trigger of demand for gold in India, M.P. Ahammed, Chairman at Malabar Gold and Diamonds said adding that gold was a liquefiable asset whose price appreciates with time. He said that the yellow metal is the safest investment option for the people. 

“Despite price fluctuations, gold will remain the most preferred investment option because those price variations have a minute impact on the investment value. Therefore, in the festive season, a significant part of the investment demand for gold will be channelized through jewellery purchases,” he added. 

The prices have been significantly up since the onset of the Covid-19 pandemic.  

The jewellery purchase had dropped significantly since March, Rupesh Jain, Founder and CEO of Candere Jewellery said. The buyers had to face the brunt of this calamity, he said.

How to neutralise the impact of price rise in festive season: 

People looking to buy gold could look for offers being provided by various companies. Ahammed said that Malabar Gold was offering ‘One India One Gold Rate’ scheme, giving gold at uniform prices across the country. He claimed it to be unique and industry-first. 

Jain on the other hand said that the ‘Double Gold Rate Protection’ (DGRP) scheme launched by the company has helped in reviving the customer confidence. “From freezing the gold rate during the tenure to investing with a small amount, DGRP has been a hit amidst our buyers,” he said.  

DGRP - an installment plan to aid jewellery shopping, offers to secure the gold rate as on the booking day rate and is kept consistent for the entire tenure, the company claims. 

Bullion Outlook: 

Physical demand has been on the rise, this festive season, Anuj Gupta, Deputy Vice President, Commodity and Currency Research at Angel Broking said while Silver was up 3.60 per cent ending at Rs 63,044 per kg.  

Increasing demand in China in Q3 2020 and weakness in dollar as risk assets got a boost on expectations of fewer regulatory changes and more monetary stimulus under US President-elect Joe Biden are the indicators that impact the bullion prices, the Senior Technical Analyst said. 

As per the China Gold association the gold consumption in China surged to 224.8 tn between July and September, up by almost 29 per cent quarter-on-quarter, Gupta said. The consumption of gold bars and coins increased by 66.73 per cent QoQ to reach 65.54 tonnes. 

Intraday strategy for MCX Gold traders:     

At 1:50 pm, the MCX December Gold Futures were trading at Rs 50,310, down by 0.4 per cent from the previous close on Tuesday. He recommended buying in Gold Futures at Rs 50,200. He puts the stop loss at Rs 49,900 while the target price at Rs 50,800.   

Intraday strategy for MCX Silver traders:     

The MCX December Silver Futures were trading around Rs 62,127 per kg around this time, down almost 1.4 per cent up in comparison to the Tuesday closing. The Senior Analyst said that the investors should look to buy it around Rs 62,400, He puts the stop loss at Rs 61,700 while the target price at Rs 63,600.

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The silver spot price in Delhi was Rs 62,400, around this time. The international price of silver was USD 24.23 per ounce.