Strong rupee keeps investors away from gold

Kolkata: Gold prices slipped by Rs 110 per 10 gm in the physical market to touch Rs 28,815 per 10 gm compared with Friday’s closing of Rs 28,925 per 10 gm. Though a drop in prices have created some interest among those who want to buy jewellery, but investors are still taking a cautious stance.

“The demand in India is seen improving. Due to strong rupee Indian prices are lower in comparison to international prices. But the rally in equities is still keeping the investors away from gold,” said Himanshu Gupta, chief market strategist, Karvy Commodities.

Gold inched down on Monday on a stronger dollar, moving away from a 5-month high hit in the previous session, although geopolitical tensions continued to buoy safe-haven demand for the precious metal. Gupta said that a decent correction is expected towards $1230 -$1240 per troy ounce and in the Indian market prices may come down to Rs 28400 per 10 gm level.

Mukesh Kothari, director, RiddiSiddhi Bullion said that physical demand of gold is likely to pick up from third week of April in run up to the Akshaya Tritiya that falls on April 28 this year. Kothari feels that gold is in a bullish mode and continues to be a safe haven due to the ongoing geo-political tension.

According to international media reports, Gold’s safe-haven appeal has been bolstered by mounting geopolitical tensions, with a U.S. official indicating on Saturday that a U.S. Navy strike group will be moving towards the western Pacific Ocean near the Korean peninsula as a show of force..

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