Gold rate today: Gold prices rose in the domestic futures market on Tuesday morning, buoyed by robust demand in the spot market on the auspicious occasion of Dhanteras. However, the dollar's rise and caution ahead of key US macro data this week capped gains for the yellow metal.
MCX Gold for December 5 expiry traded 0.30 per cent up at ₹78,800 per 10 grams around 9:20 am.
According to a Reuters report, the US dollar was headed for its best month in 2-1/2 years on Tuesday, as it eyed a 3.5 per cent gain against a basket of currencies.
Since gold is priced in the dollar globally, its rise makes the yellow metal expensive in other currencies and weakens its demand.
Investors will examine significant US macro data, including September job openings and October consumer confidence data, later in the day.
These data will offer fresh insights into the health of the US economy and influence sentiment about the US Fed rate cuts in November.
Gold has seen stellar gains in the current Samvat. Spot gold prices in India have risen 30 per cent since last Diwali. Geopolitical tensions, sticky inflation, aggressive buying by central banks, macroeconomic uncertainty and expectations of rate cuts supported gold prices this year.
"If we examine the gold return from the previous Dhanteras to this one, it generated around a 30 per cent return, and it has maintained around 15 per cent compound annual growth rate (CAGR) over the last five years. From the previous Dhanteras to this one, silver has yielded a return exceeding 35 per cent. Both metals outperform all other asset classes this year," Anuj Gupta, the head of commodities and currency at HDFC Securities, observed.
Experts are positive about yellow metal in the medium to long term. However, they anticipate some profit booking in the near term as most positives for the yellow metal seem to have been priced in. Moreover, easing geopolitical concerns and a decline in inflation may also weigh on gold prices.
According to Jateen Trivedi, VP and research analyst of commodity and currency at LKP Securities, the absence of major damage to oil and nuclear sites of Iran in Israel’s weekend attacks has eased immediate war concerns, reducing the safe-haven demand for gold.
"Should geopolitical tensions remain subdued, gold’s war premium may continue to fade, with potential tests of $2,700 to $2,680 in the near term," said Trivedi.
According to Gupta, despite the current surge in gold prices, investing in it will reap benefits in the future, and it still has the ability to provide attractive returns.
"Geopolitical and economic uncertainties, significant global ETF inflows, dovish monetary policy by western central bankers, the US election, and a lower dollar index continue to support the bullish trend in gold. Buy gold around ₹75,500–76,000 and add on dips in the ₹73,500–73,700 range for the upside objective of ₹85,300–87,000 till next Dhanteras. Keep the stop loss at ₹71,500," said Gupta.
Given the current market conditions and volatility, Gupta believes investors can be slightly overweight in gold, allocating 10 per cent to 15 per cent of their portfolio to this asset.
For silver, despite the current bullish trend, he suggests that risk-taking investors should allocate 5 per cent of their portfolio to it due to its high volatility in nature.
People tend to invest in gold via traditional mediums such as coins, bars, or jewellery items. However, some people invest in bullion through digital platforms such as futures exchanges, exchange-traded funds, gold mutual funds, and gold bees.
"We recommend buying gold in digital form as it offers numerous benefits, such as cost-effective lower premiums, no making charges, easy buying and selling, and competitive pricing," said Gupta.
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Disclaimer: The views and recommendations above are those of individual analysts, experts, and brokerage firms, not Mint. We advise investors to consult certified experts before making any investment decisions.
