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Gold prices off record high level today; may rally to Rs 55,000 by year-end, should you buy or hold?

gold, gold prices, gold rates todayFrom March lows of Rs 38,500 per 10 grams, gold prices have rallied over 28 per cent to hit a fresh all-time high level. Image: PTI

Gold prices today in India fell Rs 246 per 10 grams from the record high level of Rs 49,348 hit in the previous session. Gold prices on Thursday fell on the back of weak global trends and hopes of an economic recovery which lifted the risk-on sentiment among investors. Meanwhile, the rising coronavirus cases in India and elsewhere capped the losses in the yellow metal. On MCX, gold August futures were trading flat with a positive bias at Rs 49,172 per 10 grams, while silver September futures were up Rs 265 or 0.52 per cent to rule at Rs51,647 per kg. “I have been a strong advocate for gold buying since the start of this year and continue to hold the view that at any significant dip, gold should be bought,” Bhavik Patel, Senior Technical Research Analyst at Tradebulls Securities, told Financial Express Online.

From March lows of Rs 38,500 per 10 grams, gold prices have rallied over 28 per cent to hit a fresh all-time high level. While it has soared 25.8 per cent so far this year. Analysts see gold prices to hit up to Rs 55,000 per 10 grams by the end of this year. “Safe-haven demand is rising due to increased coronavirus cases in the world. The economic slowdown and global growth forecast lower by IMF also supported bullion,” said Anuj Gupta,  DVP Commodities and Currencies Research, Angel Broking Ltd.

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Gold prices have touched record high levels twice this month. Today it surpassed the previous high of Rs 48,982 per 10 grams, hit on July 1. Analysts suggest investors to buy gold as the resurgence in Covid cases around the world has given strong momentum to bulls. “Investors can buy gold as the price target for next 4-6 months is in the range of Rs 52500-53,000 per 10 grams,” said Jigar Trivedi, Fundamental Research Analyst, Anand Rathi Shares and Stock Brokers.

Gold analysts believe that concerns over a quick global economic recovery and a weak US dollar continue may cap the gains in the yellow metal. “The underlying trend is bullish but there is also no denying the fact that it is overbought so some caution is warranted especially for those investors who are looking to invest in precious metal now. Fresh investors should be looking in a broad range of 48700-47500 for any entry in gold. We expect gold to rally till Rs 52000-Rs 55000 by the end of this year,” said Bhavik Patel.

What should gold investors watch out for?

Even as analysts suggest investors to buy gold, there are a few factors that investors must take care of. “Global geopolitical tension and central banks policies should be tracked while investing in gold. The central bank may boost economies to maintain global growth by giving stimulus packages,” Anuj Gupta said. “We are expecting gold to test 51000 to 52000 in the next 6 months or till the end of 2020,” he added.

“Any investors who have not bought gold yet should now wait for some correction before buying as it makes no sense to chase gold at such record levels,” said Bhavik Patel.

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