Gold cheaper by Rs 4,700 per 10 gram from peak, slips below Rs 95,000. Should you buy, sell or hold?

After scaling the Rs 1 lakh mark, gold has corrected by 5% or Rs 4,700 per 10 gram. The prices could slip further and hence bring opportunities for long term investors to make a move this Akshaya Tritiya, say experts who call this as an auspicious beginning to include yellow metal for a shining portfolio.

The recent cooling-off in gold prices has been on account of a stronger dollar. The dollar index, which is a gauge of greenback’s strength against six top currencies, is clawing its way back to capture the 100-mark. Currently hovering around 99.50, DXY has gained 1.3% in the past five days after falling by nearly 10% this year.

The price movement in gold is inversely related to the dollar movement. The turnaround has been on account of President Donald Trump’s U-turn on reciprocal tariffs, deferring implementation until July. He has also curtailed his belligerence on China while declaring that he has no plans to sack Federal Reserve chair Jerome Powell.

Anuj Gupta, Head Commodity & Currency at HDFC Securities said that Akshaya Tritiya will be a good occasion to strengthen one’s portfolio by adding gold. He recommends 15-20% allocation for gold and silver.

Notwithstanding the recent correction, gold has still returned 23% income on investments this year so far, Gupta said. This amounts to an uptick of Rs 18,000 per 10 gram on the year-to-date basis.

He remains bullish on gold’s prospects placing the target upwards of Rs 1 lakh. His advice to investors is to invest via systematic investment plans (SIPs) or buying in a staggered manner and not do a lump sum purchase.Colin Shah, MD, Kama Jewelry said that the current trend is shifting towards daily delight jewelleries (every day jewellery) and is increasingly becoming a preferred choice among young buyers. “We look forward to a 10-15% spike in jewellery sales this season, supported by robust buying sentiments and price dynamics,” he added.

How to benefit from charts?

Decoding the charts, Renisha Chainani, Head – Research at Augmont highlights the creation of a ‘Shooting Star’ candlestick pattern in the weekly charts. This indicates a probable uptrend reversal, which was an intriguing technical component of gold’s price movement last week, he said.

“If prices sustain below $3,300 (Rs 95,000) this week, they may fall 50% to $3,240 (Rs 93,000) and 61.8% to $3,175 (Rs 91500). Having said that, if there is a new trigger of instability in trade talks in the market, we could see gold prices rebounding again. And if prices sustain above $3,380 (Rs 96,400), we could see a run up towards $3435(Rs 97,400) and $3,500(Rs 99,400),” Chainani added.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)