The gold and silver prices saw a moderate pick-up on Monday after commencing the day with an weak trend. However, gold and silver were able to recover during the day as their prices followed an stable trend in global markets. Despite an uncertain start to the day, which kept investors in a dilemma, gold and silver have again attracted attention as viable investment options.
With gold prices nearing ₹1.48 lakh and silver trading above ₹2.28 lakh on the Multi Commodity Exchange (MCX), investors are now pondering over an interesting question: is it time to invest in gold and silver or wait for an appropriate opportunity?
Gold Prices Demonstrate Resilience Despite Volatility
Currently, MCX Gold is quoted at ₹1,47,683 for every 10 grams, up by ₹428. Despite some volatility in the market, experts are of the opinion that gold is currently showing resilience by staying above key support levels.
According to market experts, the level of ₹1,46,000 has become an important support level for MCX Gold. As long as the price of the metal remains above this level, the overall market trend is expected to remain stable.
Ponmudi R, who is the CEO of Enrich Money, said, “MCX Gold is showing signs of underlying buying interest in the market, despite some volatility in the market today. MCX Gold opened with a mild gap up today and is currently trading above the support band of ₹1,46,000.”
Resistance Levels Could Determine the Next Move of Gold
Currently, gold prices are stable, but the next big move for gold will depend on whether it can break through the resistance levels.
Experts have identified the range of ₹1,49,000 to ₹1,50,000 as the current resistance levels for gold. If gold manages to sustain above this range, then the bullish sentiment in the market will increase.
If gold breaks through the level of ₹1,50,000, then there are possibilities that the gold prices may go up to the level of ₹1,53,000 in the near future. In addition, there are possibilities that gold may go up to the level of ₹1,58,000 in the near future.
Experts, however, advise that investors should not forget the downside risks.
Downside Risks of Gold Prices Still Exist
Despite the positive sentiment, gold prices are vulnerable to a sudden correction.
Experts advise that if gold falls from the level of ₹1,44,000, then there are possibilities that profit-booking may start in the market. In addition, there are possibilities that gold prices may go down sharply as investors seek to liquidate their positions.
This means that even though the general sentiment of the gold prices is positive, investors need to remain cautious as global developments could quickly change the market sentiment.
Silver Follows Similar Pattern
Similar is the case with Silver, which is also showing similar movements and is rising steadily with support from good demand and supply.
Currently, MCX Silver is quoted at ₹2,28,395 and is rising by ₹441. The metal is opening strong and is holding firm over its support level of ₹2,26,000.
Experts say that Silver is depending heavily on this support level to continue its rising trend.
The resistance level of Silver is placed near ₹2,32,000. If Silver is able to rise over and sustain over this level, it may touch ₹2,37,000 and ₹2,40,000 in the near future.
Similar to Gold, Silver is also showing downside risks and is likely to fall if prices go below ₹2,20,000, which may lead to selling in the market and may fall further to ₹2,15,000, whereas the support level of Silver is placed in the range of ₹2,00,000 and ₹2,05,000.
Global Factors Creating Market Uncertainty
One of the biggest factors that is affecting the prices of precious metals is the global economic scenario.
At present, international gold prices are stable and volatile due to various global factors. The US dollar is declining, and this is positively affecting gold prices. The gold price is rising as it is becoming increasingly attractive for investors worldwide.
However, at the same time, there is also an increase in energy prices, and this is creating concerns for many nations. Traditionally, gold is also seen as a hedge against inflation. This is also one reason why gold prices are remaining stable in uncertain times.
However, at the same time, there is also another factor that is limiting the upside in gold prices. This factor is interest rates.
At present, there is a perception that there is a lesser chance for the US Federal Reserve to reduce interest rates. When interest rates rise, gold prices remain low as gold is not yielding fixed returns like other financial instruments.
What Should Investors Do Now?
Experts have suggested that in the present market conditions, investors should be cautious.
The prices of gold and silver are maintaining stability. However, there is no clear direction in the market at present. Any unexpected global events, exchange rate fluctuations, or announcements could cause prices to fluctuate.
For long-term investors, buying gold in small amounts during price corrections could be a good approach. If gold prices remain above the ₹1,46,000 mark, then buying gold in small amounts could be beneficial in creating a strong portfolio.
Similarly, buying silver in small amounts could also be beneficial if prices remain above the ₹2,26,000 mark.
For short-term investors, it is recommended that they be cautious. The resistance levels have not been broken, and global markets are also not clear. Therefore, prices could fluctuate in the next few days.
Experts have recommended that investors should not enter the market aggressively at higher levels. They should focus on key levels of gold and silver.
The Bottom Line
Currently, gold and silver prices are showing signs of resilience in the face of global uncertainty. The presence of strong supporting prices and demand for gold and silver has resulted in a positive bias for both metals in the market.
However, the role of resistance levels and global economic conditions will be significant for gold and silver prices in the near future.
This seems to be a wait and watch situation for investors, and a cautious approach of accumulation on dips may be a better strategy than entering the market at current highs.
As always, before investing, financial experts advise investors to consult a financial expert.
