Gold becomes more attractive, futures decline by Rs 2,500 this week; should you buy now or wait? 10 things to know

Gold Rate Weekly Trend: With domestic gold futures on track to finish the week about three per cent lower, many investors are once again scouting for the right opportunity to enter the precious metal from an investment perspective. While the spot rate in Ahmedabad was hovering around the Rs 71,750 per 10 grams mark at the last count on Friday, MCX gold futures for June 5 and August 5 deliveries stood at Rs 71,374 and Rs 71,550, down by Rs 2,337 and Rs 2,505 for the week, respectively. 

Here are 10 things to know about the gold rate in India this week: 

1. On Friday, the two MCX gold futures contracts were down 0.3 per cent each in the first hour of the evening session on the bourse. While the June 5 contract fell by as much as Rs 203 to Rs 71,374, the August 5 contract was down by Rs 239 at Rs 71,550.

2. MCX gold futures are on course to log weekly losses of 3.2-3.4 per cent at their intraday lows on Friday. The spot rate is down 1.7 per cent so far this week.

3. While several analysts believe gold is in a positive long-term trend, some even say the weekly drop can be utilised as a buying opportunity. 

4. 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. 

5. Factors such as geopolitical uncertainties, buying by central banks and hopes of a reduction in benchmark interest rates are expected to support gold prices over the long term, said Ajay Kedia, Managing Director at Kedia Commodities. 

6. 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. 

7. “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,” Kedia told Zeebiz.com. 

8. 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

9. “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. 

10. Gold target: 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.

With inputs from agencies