Gold Price Today: Short-sighted Investors Need To Take Profits Now; higher import duties, weak rupiah may halt price correction temporarily

Gold investors with a short-term view need to make profits now, says expert Anuj Gupta. He said that internationally, prices are falling and the price correction will also start to be felt in domestic markets.

Rising import duties along with a weaker rupee may not sustain gold prices in India for long if prices fall globally, Gupta said, adding gold could become more expensive for domestic investors, only temporarily.

The price of the yellow metal broke through an important support level of $1800 today and it sees it testing levels of $1770.

Higher import duties and a stronger US dollar against the INR may appear as a double whammy for investors, but falling prices in international markets will eventually have an impact here as well, said the Vice President (VP), Commodity and Currency Research at IIFL Securities.

The government on Friday raised the duty on gold imports from 10.75% to 15% to halt the rupee’s slide. The surge in gold imports is putting pressure on the current account deficit, according to a press release from the Ministry of Finance. In May, India imported 107 tonnes of gold and June exports are also expected to remain high, the statement said.

India is one of the biggest importers of the yellow metal and gold demand could be hit due to increased import duties, the vice president said. Linking the likely drop in Indian gold imports to the possibility of oversupply in world markets, he said prices could fall further in international markets.

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Gupta’s advice to investors is to book profits if they’re looking for quick wins. He recently offered a buy strategy on gold and silver futures.

He said news of a higher fee helped MCX August futures gain nearly 1,400 points. As of 9:30 p.m. Friday, prices were up 2.7% from Thursday’s last close. “We recommend selling higher with the 53000 stoploss for the target 50500-50000 levels,” Gupta said.

He sees strong support in gold futures at Rs 50,500 then Rs 50,000 while the first level of resistance at Rs 52,300 then Rs 53,000.

Meanwhile, July silver futures were trading at Rs 58,304 and were up Rs 583 or nearly 1% at that time. He first sees support at Rs 57,000 then at Rs 54,000 and resistance at the Rs 61,000 and 63,000 levels.

Selling is advised at Rs 61,000 with the stop loss of Rs 63,000 for the target of 57,000 levels.

Last month gold corrected over 1.50% and silver over 3%.

(Disclaimer: Opinions/suggestions/advice expressed here in this article are investment experts only. Zee Business suggests its readers consult their investment advisors before making any financial decisions.)