Akshaya Tritiya: Religare Broking lists 6 key reasons to buy gold in 2024

He advised buying golden arsenic agelong arsenic prices support supra ₹68,500 per 10gms, targeting an archetypal upside of ₹74,000 per 10gms, followed by ₹78,000 per 10gms levels. Conversely, a decisive interruption beneath the erstwhile plaything debased of ₹65,200 per 10gms could disrupt the trend, perchance starring golden to retest the ₹63,300-Rs.63,800 per 10gms range, it predicted.

Read here: Gold terms rises ₹40,000 successful 5 years. Experts spot up to ₹85K highest adjacent year

Technical View

Following a robust show past year, golden has been persistently climbing upward, registering an approximate 12.50 percent summation connected home exchanges frankincense far.

On the regular chart, Religare noted that prices are presently consolidating aft a crisp rise, with ₹70,000 per 10 gms ($2280) acting arsenic a pivotal level. Although buyers are hesitant to participate during this consolidation phase, a flimsy dip towards the 50 SMA astatine ₹68,500 per 10gms ($2235-$2240) could contiguous a favorable buying accidental for the adjacent limb of upward momentum, it said.

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Meanwhile, connected the play chart, prices person extended distant from the 20 SMA and 50 SMA, prompting bulls to expect a pullback. A impermanent intermission successful prices indicates a affirmative signal, particularly since there's a bullish flagpole signifier successful play, which whitethorn widen further earlier prices resume their upward trajectory, added the brokerage.

Outlook Ahead

As per the brokerage, the aboriginal of golden remains dynamic, shaped by assorted planetary factors specified arsenic cardinal slope policies, geopolitical scenarios, and economical indicators.

While the gains seen successful the existent twelvemonth are commendable, the humanities inclination of higher returns during turbulent periods highlights gold's imaginable to flourish amidst heightened uncertainty.

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The brokerage explores the reasons that presumption golden arsenic an appealing concern enactment for the twelvemonth ahead:

Fed Monetary Policy

Religare noted that the Federal Reserve has sustained a restrictive attack to monetary argumentation during this fiscal year, maintaining involvement rates astatine 5.25-5.50 percent for the past six meetings. Recent anemic US occupation information and the Fed's inclination towards easing suggest imaginable complaint cuts by year-end. Investors present foresee conscionable 1 complaint chopped this year, which could pb to a weaker dollar and perchance boost golden prices.

US CPI Inflation

Religare highlighted that Federal Reserve Chair Jerome Powell has expressed uncertainty astir achieving the 2% ostentation target, with U.S. ostentation presently astatine 3.48%, supra the target. Recent information suggest ostentation is cooling disconnected much dilatory than expected, with the user terms scale rising 3.5% year-over-year successful March 2024. Additionally, rising conflicts successful the Middle East person driven up crude lipid prices, exacerbating inflation. Gold's relation arsenic a hedge against ostentation suggests it whitethorn stay a favorable concern enactment successful the coming months.

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Geopolitical Tensions

According to Religare, geopolitical tensions successful 2024 are chiefly concentrated astir the Gaza war’s determination impact, with concerns regarding Syria's narration with Hezbollah and Hamas, supported by Iran. There is ongoing hostility betwixt Israel and different Arab nations, and the Ukraine-Russia struggle continues, highlighted by caller Russian attacks connected Ukraine's state pipelines supplying the European Union markets. There is nary denotation these tensions volition extremity soon, which suggests that the request for golden arsenic a safe-haven plus volition continue, perchance starring to further terms appreciation.

Geopolitics And Its Impact On Gold Prices

Religare reports that the planetary system whitethorn acquisition mediocre show by the extremity of 2024, marking the slowest half-decade of GDP maturation successful the past 30 years. Global maturation is projected to diminution to 2.4% successful 2024 from 2.6% successful 2023 portion processing economies are expected to turn astatine 3.9%. Although the hazard of a planetary recession has diminished, suggesting a strengthening US economy, rising geopolitical tensions could airs caller challenges for the satellite economy. The International Monetary Fund (IMF) forecasts a gradual diminution successful planetary inflation, falling from 6.8% successful 2023 to 5.9% successful 2024 and 4.5% successful 2025. The alteration successful maturation is expected to payment golden prices arsenic safe-haven request for the precious metallic increases during turbulent times.

Read here: Gold rises connected Fed complaint chopped bets: 5 reasons down yellowish metal's entreaty successful 2024

Demand from Central banks

Religare highlighted that cardinal banks presumption golden arsenic a captious portion of their fiscal reserves for diversification and managing home currencies. In 2023, cardinal banks globally purchased 1,037 tonnes of gold, somewhat little than the 1,082 tonnes bought successful 2022, which was the highest magnitude since 1967. Currently, cardinal banks clasp astir 20% of planetary golden production, with one-third of that being acquired successful 2023.

In Q1 2024, cardinal banks bought astir 290 tonnes of gold, exceeding the erstwhile year's record, with China, Turkey, and India starring the acquisitions. This beardown commencement suggests ongoing robust request for golden successful 2024.

Gold Investment Demand

According to Religare, the World Gold Council's Q1 2024 study shows a 3 percent summation successful planetary golden demand, totaling 1,238 tonnes, marking the strongest archetypal 4th since 2016. This maturation was mostly owed to beardown over-the-counter (OTC) marketplace investments and accordant cardinal slope purchases. Demand for bars and coins besides accrued by 3%.

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However, excluding OTC transactions, wide request fell by 5 percent to 1,102 tonnes successful Q1 2024 compared to the aforesaid play past year. In 2023, ETF outflows and a flimsy driblet successful barroom and coin request resulted successful a full yearly golden concern diminution to a 10-year debased of 945 tonnes, down 244 tonnes from the erstwhile year. Additionally, Q1 2024 saw a planetary golden ETF holdings alteration of 114 tonnes.

Asia, peculiarly China, experienced maturation successful gold-backed ETF holdings successful 2023 owed to planetary geopolitical tensions, a declining dollar index, US enslaved yields, and uncertainty regarding aboriginal complaint cuts by the Federal Reserve.

These factors combined bespeak a promising outlook for golden investments successful the adjacent future.

Disclaimer: The views and recommendations made supra are those of idiosyncratic analysts oregon broking companies, and not of Mint. We counsel investors to cheque with certified experts earlier taking immoderate concern decisions.

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Published: 10 May 2024, 01:38 PM IST