Diwali is considered to be auspicious occasion for buying gold and irrespective of the price, gold is bought by Indians. Analysts believe the investment demand will continue to rise in 2021 taking in to consideration the unprecedented amount of liquidity flush by central banks across the globe. The surging covid infections also adds cherry on the cake for global investors to increase their allocations towards the yellow metal. “Although, the physical demand numbers released by the WGC does not represent a good story for India, It is advisable to increase gold allocation in your entire portfolio from 10% to 15 % taking in to consideration the uncertainty revolving around global economy,” says a report by Angel Broking.
As seen in the yearly price chart of MCX Gold, we noticed that prices have moved almost 30% up in year 2020. In year 2020 prices had made a high of 56,191 levels and low of 38,400 levels. The long term trend of Gold is positive. Prices have formed “Higher Top and Higher Bottom Formation” which is sign of bullish trend.
According to World Gold Council, India’s gold demand is expected to fall to the lowest level in 26 years with domestic bullion prices hitting a record high and as falling disposable incomes could further curtail retail purchases. “India’s gold consumption in the first half of 2020 plunged 56% on-year to 165.6 tonnes. Meanwhile, the coronavirus-triggered lockdown also slashed demand by 70% in the June quarter to 63.7 tonnes, the lowest in more than a decade,” says Angel Broking.
What is the good level to buy gold?
Analysts at Angel Broking expect Gold prices to find support at 47,500 – 44,000 ($1800 – $1680) levels. “Resistance is now observed in the range of 55700 – 56500 ($2100) levels. Trading consistently above 56,500 levels would lead towards the strong resistance at 62,500 ($2300) levels, and then finally towards the major resistance at 67,000 ($2500) levels.” says the report.
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