Gold Prices Find Support From Depreciating Rupee; Now Above Rs. 46000/10 Gm

Gold prices on the MCX on April 8, 2021 traded weak by a mild percentage to Rs. 46358 per 10 gm. In the yesterday's session, gold ended higher at Rs. 46344 owing to a host of reasons including rupee's depreciation to beyond levels of 74 per US dollar, retreat in US treasury yield and rising covid 19 cases which for the third day surpassed 1,00,000 new cases mark.

In the international markets too gold prices fell after the US Federal Reserves's latest minutes stressed on continuing with its policy support measures. Spot gold inched down 0.03% to $1,736.76 per ounce at 0149 GMT.

Outlook for gold For Diwali 2021

There is a bullish outlook despite the sharp correction seen in gold prices in the first quarter of the CY 2021 after record high prices seen in August 2020 of over Rs. 56000 per 10 gm. For Diwali 2021, there are expectations that gold price may scale to Rs. 52000 per 10 gm, while in the international market, gold prices could go up to $1900 per ounce.

Further on the outlook for gold price, IIFL Securities Vice President-Commodities and Currencies said " In India the price of gold is surging on the back of high physical demand owing to the upcoming marriage season, while in the global market, dollar weakness as well as retreat in the US-10 year yield was also supporting a bullish trend in gold price.

What should investors do?

There is suggested that investors can buy into gold at every large dip as gold price once sustains over Rs. 45500 to 45600 per 10 gm, it would seen hit Rs. 48000 levels.

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