Gold remains in a BULL RALLY, brokerage firm Anand Rathi says; recent dip is mere a correction

Gold is still in a bull rally and the dip noticed is mere a correction for the time being, Anand Rathi Share and Stock Brokers said in its quarterly bullion report, likening the yellow metal to...

The report says, “Gold never entered bear market territory over the last month, as losses were contained at just below 20 per cent. This is a normal market correction but has been exacerbated by fears of positive real interest rates and a technical breakdown.” 

It further adds that the bull market of Gold began in late 2016, and it’s still alive and well and likely entering its next upswing. Comex gold is at 16 per cent off its all-time highs (i.e. down seven per cent Year-to-date) hit last summer, giving investors a prime entry point. 

Stating that the bulls and bears are fighting hard around USD 1735 per ounce of gold, the brokerage firm says, the gold market has struggled to find any bullish traction since hitting its all-time highs in August last year. 

The factors that drive yellow commodity includes massive stimulus packages, record-low short-term interest rates and still historically low long-term rates along with pent-up economic demand as Covid-19 abates.

Meanwhile, Anand Rathi Share also points out the biggest threat to Gold which is the rising bond yields -highest in more than a year. The 10-year notes last traded over one and a half per cent positive.  

The report concludes that If US continues to report improvement in economic activity, the DX and 10Y bond yield may rally in April, then the yellow metal could feel the pain and fall further, However, the metal is already down significantly from an all-time high hence lower price is expected to attract retail participation in terms of jewellery demand, especially from India. 

The trend in gold rates on Thursday continued as it appreciated by Rs 90 per 10 gram. In Mumbai, the Gold price today stood at Rs 44,850 for 22-carat and Rs 45,850 for 24-carat. Meanwhile, the gold price in Delhi is Rs 45,950 for 22-carat, and Rs 50,120 for 24-carat.