Will Gold halt its recent up move or begin a fresh secular up-trend? Find out now!

Will Gold halt its recent up move or begin a fresh secular up-trend? Find out now!

by 5paisa Research Team Last Updated: Dec 11, 2022 - 03:14 am 46.7k Views
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Recent times have been quite volatile for the Indian markets. After gaining nearly 20 per cent from the July 28 low, the Nifty at the moment is trading nearly 3 per cent down from the all-time high. Moreover, from the past few trading sessions, volatility has hit the shores for the Indian market amid alarming inflation rate in the US, and corporate results. In times of such uncertainty, one needs to turn their attention towards the precious metal for stability.

The probable reason for the increase in gold prices is the high inflation numbers from the US and China.

The gold price is at the highest level since mid-June 2021 in the Indian market. It has been observed that gold acts as an ideal hedge during the falling market and keeps the value of the portfolio intact. Gold shot up around 3000 points since October. Furthermore, it has outperformed the Indian benchmark indices on an MTD basis. Investors across the globe are shifting to safe-haven owing to much hotter-than-expected inflation in the US. The October consumer price index (CPI) jumped 6.2 per cent, the highest monthly rise in the last three decades. Hot inflation numbers from the US and China has created buying interest in Gold in recent times. Owing to this, traders and investors are seeking to hedge their assets against the unpredicted volatility of the market.

On Friday, gold futures traded flat at Rs 49,200 per 10 grams. From a technical perspective, Gold is just trading below its resistance of Rs 49,750-50,000. The level of Rs 49,750 is resistance defined by the horizontal trendline, while the level of 50,000 is a big round number, hence, it would tend to act as a resistance level as well. Hence, once the level of Rs 49,750-50,000 is taken out on a closing basis, expect a further extension of this up-move. However, considering the volatility in the global markets and the domestic market, the good news is that the wedding season is around, and the yellow-metal would be in limelight. Talking about wedding season, as per the estimation by a traders association Confederation of All India Traders (CAIT) in Delhi alone they expect over 1.5 lakh weddings. And, we believe it’s just a matter of time that the yellow-metal breaches this strong resistance level and scales to new swing highs.

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