Will Gold Be A Good Buy This Dhanteras?

The festival of Dhanteras is falling on November 2, 2021 this year and is a time when people consider buying into gold and other investments such as real estate as highly auspicious. Here we will delve on whether current pricing of gold and its outlook going ahead making it a good or worthwhile investment this Dhanteras.

Current gold pricing:

Gold prices have been hovering lower and in the international markets saw a big crash on the last trading day of October by as much as 0.82 percent to again below key psychological level of $1784.3 per ounce. The crash is seen amid global bankers’ policy stance. In the futures market too gold futures for December slipped by Rs. 354 to Rs. 47607 per 10 gm. Likewise, silver prices also tumbled by over Rs. 400 to Rs. 64,540.

Likely prospects for gold going ahead

The US Fed is slated to meet for a meet on November 2 and November 3 wherein it shall provide for its bond buying timeline. In a case if it begins tapering its asset purchases, thereby impacting liquidity. The stance will weigh on gold prices and the future rate hike shall even further be more detrimental for the bullion.

Notably, on Thursday the ECB stood pat on interest rate and its move to maintain favorable financing conditions is in contrast with other central banks.

Suggestions to investors

Experts continue to suggest a ‘buy on dip’ strategy which can see further softening in price going ahead owing to liquidity narrowing and interest rate hike. Nonetheless concerns around inflation, uncertain outlook and still prevalent coronavirus situation will continue to support gold prices. As for gold purchase on Dhanteras, gold can be purchased in a staggered way on Dhanteras in may be digital form to cut down on storage, making or other charges as it is believed to last for lifetime if the purchase is made on this specific day of importance.

Gold price outlook for the near term

“Gold prices traded under pressure on a stronger dollar and mixed global cues. The precious metals may keep a steady trading range ahead of the US FOMC meeting next week. ECB President Christine Lagarde acknowledged higher inflation, she pushed back against market bets that inflationary pressures would trigger an interest rate hike as soon as 2022”, said Tapan Patel- Senior Analyst (Commodities), HDFC securities.
Patel expects gold prices to trade sideways to down with COMEX spot gold resistance at $1,810 and support at $1,785 per ounce. MCX Gold December support lies at Rs 47,700 and resistance at Rs 48,200 per 10 gram.

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