Gold Prices Surge Ahead of Akshaya Tritiya: Here's What Analysts Are Saying

Gold Price Today: After experiencing a marginal downtrend, the rate of the yellow metal took a U-turn on Tuesday. The brief period of profit-booking was largely owing to signs of easing trade tensions, with the US administration highlighting that it is planning to strike a deal with China. However, no concrete details about the trade deal have been disclosed yet. On Tuesday, the rate of 24-carat gold (per 10 grams) jumped to Rs 98,120 in the Delhi NCR region as per GoodReturns.

However, as the auspicious festival of Akshaya Tritiya is just a day away, several families are planning to purchase gold. And, given all the chaos around trade tensions and macro turbulence alongside other factors impacting the gold prices, the decision to purchase the yellow metal might become a confusing task for some.

However, the rally in the safe-haven asset has managed to beat every other asset class, especially equities, in-terms of returns generated. So far this year, gold price has surged over 26%. In contrast, NSE Nifty50 has witnessed a mere single-digit surge during the same period.

"Gold emerged as the ultimate safe-haven asset this year after the tariff war between the USA and China rattled the financial market. Investors flocked towards the yellow metal to seek refuge due to economic uncertainty," said Deveya Gaglani, senior research analyst- commodities, Axis Securities. However, many have now raised banners of caution as the yellow metal might have entered an overbought zone.

"As gold prices have surged and are approaching overbought levels, we recommend that investors consider buying gold in a staggered manner if prices correct by 5-10%. Currently, the risk-reward ratio is unfavorable at these record levels," said Gaglani

Last month, an analyst at Morningstar estimated a prospective drop of around 40% in gold price levels. John Mills, a US-based strategist, estimated the price level of yellow commodity to fall to $1,820 per ounce. On top of this, Solidcore Resources plc, a leading gold producer in Kazakhastan, pointed out that the yellow metal might witness a big drop in the coming 12 months.

"There will be no return to the levels of $1,800-$1,900. The premium to the base level will remain. But right now this is an over-reaction to what is happening in the world," said Vitaly Nesis, CEO of Solidcore Resources plc.

Key Price Range

"In a bullish scenario, if prices hold above 100,000, they could reach 110,000 by the next Akshaya Tritiya. Conversely, we expect prices to consolidate around the 87,000 level on the downside," as per Gaglani.

"Market participants now await critical US macroeconomic data — including ADP Nonfarm Employment Change, Nonfarm Payrolls, and the Unemployment Rate — which are expected to guide gold’s next move.

For the short term, gold is expected to remain volatile within a range of Rs 94,000–Rs 96,000 on MCX," said Jateen Trivedi, VP research analyst - commodity and currency, LKP Securities.