Dhanteras 2020 | No better time to buy Gold as it trades around Rs 50,000/10 g: Axis Securities

The bullion metal lost Rs 2,562, or 4.68 percent, for the week on MCX as investors booked profit (Image courtesy: Reuters)

Gold price surged from $1,500 mark per troy ounce in April 2020 to the peaks of $2,075 an ounce in August 2020 on account of the global economic shutdown due to the pandemic.

Central banks pumped in money through stimulus packages across the globe to revive the dwindling economies that pushed inflation driving Gold prices up.

Gold prices also found support by descent buying from Central banks, record ETFs purchases, and good institutional participation as a safe haven.

The US and China trade tensions also supported the prices as the second-largest global economies imposed trade restrictions impacting global money circulation hampering demand.

However, the yellow metal as we know, consolidated once the lockdowns were eased to bring the global economy on the track followed by positivity on COVID-19 Vaccine, improved the risk appetite of investors towards riskier assets, bringing down the yellow metal prices to $1880 levels.

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Sunilkumar Katke

Head - Commodities/Currency|Axis Securities

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Also Read: Dhanteras 2020 date in India and other details about the festival that marks the beginning of Diwali

Domestically, the prices at MCX touched an all-time high of Rs. 56,200 in August 2020 and are now trading at Rs. 50,000 mark per 10 grams.

In India, there is no better time than Dhanteras to buy Gold as it is considered as one of the most auspicious occasions in Hindu culture and marks the beginning of the festival of light Diwali.

Historically, the Gold prices have moved up during this time of the year as Indians are known to buy Gold and silver on this auspicious occasion improving physical demand for the yellow metal.

The prices are close to Rs. 50,000 per 10 grams now and no better time to accumulate Gold as an investor, especially the ones who missed the recent rally.

The future still looks bright for Gold prices considering the festive demand, uncertainty linked to US elections with a possible new President-elect bringing in a lot of policy changes.

Further, the additional stimulus measures to deal with the pandemic, lower real yields backed by higher inflation across the globe may support the Gold prices up towards Rs. 52500 - 53500 levels again in a months’ time, thus making it a good opportunity to buy on this auspicious occasion of Dhanteras"

(Sunilkumar Katke, Head - Commodity and Currency, Axis Securities)

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