Gold-Silver Investment Strategy: Gold and silver are considered as better options as a safe investment. Last August, gold prices had crossed a record high of Rs 56000 per 10 grams in August 2020 and since then the price of gold has declined by Rs 8000 per ten grams. Apart from the strengthening of the dollar in gold and the rise in US Treasury Yields, the decline in monetary policies led to this decline. Although gold has shown a slow rise in the last few days, there is a profit opportunity for investors. Gold with an expiry of 5 April 2021 on MCX is running at 48007 price, which is expected to reach 49500 in the next few days. To tackle the sluggish economy caused by the Corona epidemic, governments around the world are announcing a relief package, which led to an increase in gold.
Talking about the second precious metal, silver, in August last year, its price reached a record high of Rs 76000 per kg. The price per kg of silver has been reduced by about 8 thousand rupees from the record high of August 2020. Silver with the expiry of April 5, 2021 on MCX is running 69005, which is expected to reach 73800 in a few days.
How to make a strategy for profit in gold and silver
- Investor Strategy for Gold- Buy in the price range of 47,000-47,200 with a stop loss of 46,600 and keep the target 48,800-49,500.
- Investor Strategy for Silver- Buy in the price range of 68000-68600 with a stop loss of 66800 and keep a target of 71500-73800.
Due to this, gold-silver may rise rapidly
- Economic activity is expanding due to which the demand for jewelery may increase. In the fourth quarter of 2020, jewelery demand in India increased by 125.8 percent compared to the third quarter.
- Due to geopolitical tensions (disputes between countries), the price of gold-silver can also increase.
- Prices of these precious metals will also be affected as inflation increases. The US Federal Reserve has already stated that for some time it is concerned about increasing economic activity rather than inflation and is running a short-term target of 2 per cent. This means that as long as inflation remains below this target, the US Federal Reserve will not make any effort to stop inflation.
- Rates are likely to remain cut for the next two years. When the rate increases, the US dollar gets strengthened and this causes the gold price to fall.
- Retail demand is increasing due to the fall in prices.
(This story is based on a report by Kedia Advisory.)