Gold just became more attractive last week; good time to buy for long term?

Gold Rate Today, Gold Rate in India Latest News: Domestic gold futures logged weekly losses of more than three per cent last week. The downswing in the prices of the precious metal has left many investors wondering whether it is a good opportunity to add more sheen to their portfolios or wait a bit for more favourable levels. On MCX, gold futures for June 5 and August 5 deliveries fell by Rs 2,432, or 3.3 per cent, and Rs 2,525, or 3.4 per cent, to settle at Rs 71,279 and Rs 71,530 levels for the week, respectively. That while the spot gold in Ahmedabad slumped to Rs 71,754 per 10 grams all the way from Rs 73,016 per 10 grams a week ago—a weekly decline of Rs 1,262 or 1.7 per cent.

Buy gold now or wait? What should investors do?

First things first, analysts expect gold prices to be supported by several factors over the long term, including:

• Geopolitical uncertainties
• Buying by central banks
• Reductions in benchmark interest rates

What next in gold?

“Gold and silver appear to be taking support at key levels after the big fall over the past few days while the dollar index looks weak,” Ajay Kedia, Managing Director at Kedia Commodities, told Zeebiz.com.

Silver futures (July 5) finished the week lower by Rs 484, or 0.5 per cent, at Rs 90,540 per kilogram.

Should you buy gold now? 

“We suggest buying gold on dips from an investment perspective around $2,310 per ounce (international)/Rs 70,300 per 10 grams (domestic),” Manoj Kumar Jain, Director-Head Commodity and Currency Research at Prithvi Finmart, told Zeebiz.com. 

What’s the relationship between gold and interest rates? 

Traditionally, gold and interest rates share an inverse relationship, meaning gold becomes more attractive as a store of value when interest rates fall, and vice versa. 

Where can you expect gold and silver to move in the short term? 

“Gold is likely to move from significant support placed at Rs 71,000 towards Rs 72,500. Silver has touched the $32.5 an ounce mark and retreated, but it is not giving up key support at $30 (Rs 90,000 per kg). As long as silver does not breach the Rs 90,000 mark on the downside, one can expect it to move towards Rs 93,000 levels in the coming days,” Kedia said. 

Read more on latest gold & silver rates here

“Gold is in a long-term uptrend… One can buy gold near Rs 70,000 levels and silver near Rs 87,000-88,000 for the long term,” he added. 

What's the target price for gold from the current juncture?

Jain expects gold to test targets of $2,500 per ounce or Rs 76,000 per 10 grams by Diwali, and $2,600 or Rs 80,000 by the end of 2024.

How much gold to keep in a portfolio?

Many wealth planners suggest allocating up to 15 per cent of an investment portfolio to gold at a given time.  

With inputs from agencies