With Markets At All-Time High, Investors Likely to Turn to Gold

KOLKATA: Gold may witness some demand from investors in India on Akshay Tritiya, according to analysts and traders, since the metal is expected to give good returns in the second half of the year.

Hindus and Jains consider it auspicious to buy gold and jewellery on Akshay Tritiya, which falls on May 7 this year.

Analysts said gold will trade in the upper range of $1,250-1,350 per troy ounce as uncertainty over global events is likely to grow in the second half of the year. With the Sensex crossing the 39,000 marks, they said, investors may not flock to the equity market since valuations of stocks are too high and there is uncertainty in the stock market over whether this renewed strength is here to stay because of worries about climbing oil prices.

International spot prices of gold have declined 5 per cent to $1,275 per troy ounce from the high of $1,346 seen this year as investors have not shown much interest in the precious metal in 2019. Gold prices came under pressure with extension to Brexit deadline and progress in US-China trade talks which improved investment sentiment for riskier assets. The positive economic data from the US and China so far this year also contributed to the rally in equity indices and lowered safe-haven demand for gold.

“However, we expect the second half of the year to be crucial for global markets and expect gold prices to trade in the upper range of $1,250-1,350 with uncertainty over global events,” said Tapan Patel, senior analyst (commodities), HDFC Securities.

“The end of Iran sanctions waivers from the US and ongoing Opec output cut deal will raise the oil import cost for the importing countries which can have an inverse impact on equity markets, resulting in higher demand for safe-haven assets.”

Courtesy: Economic Times