The recent correction in gold prices ahead of Akshaya Tritiya offers investors a good opportunity to buy the precious metal, says Axis Securities. On MCX, gold futures were trading around 1.5% to ₹50,992 per 10 gram, tracking weak global cues. Silver futures were down 1.8% at ₹63,200 per kg. Gold prices are down sharply from March highs of ₹55,600 as traders bet on aggressive rate hike by US Fed. A stronger US dollar has also dimmed the safe-haven appeal of gold.
Gold prices have historically inched higher during the times of Akshaya Tritiya but this time the rising anticipation of the Fed’s aggressive policy stance has put pressure on the metal prices.
“This could be a perfect time for investors looking for a window of opportunity to start investing in gold. Recently, Gold prices have come under pressure as the Federal Reserve looks almost certain to approve a 50- basis point rate hike at the May policy meeting on Wednesday, the highest hike in over two decades,” says Pritam Patnaik, Head – Commodities, HNI & NRI Acquisitions.
“During periods of high inflation, recession, and geopolitical turmoil, gold has been the asset of choice as the ultimate safe haven bet. Of late, a strong US dollar has diverted some of the flows, but gold continues to be the largest benefactor,” he added.
Mr Patnaik suggests a staggered approach to investing.
“One can look at investing a part of their allocation during the auspicious date and subsequently allocate the balance as and when the prices dip, which will be around the dates of Fed policy rate announcements,” he added.
Domestic brokerage Motilal Oswal suggests a cautious approach to investing in gold until “market participants get a sense of, how the interest rate hike cycle and geo-political uncertainties will impact the market and the overall economic numbers.”
“However, we continue to maintain positive bias in silver and suggest to build positions on dips. As along with safe haven push silver is also getting support as an industrial metal creating a positive scenario for the white metal,” the brokerage said.