Currently, the gold is trading at Rs 29,550 level, which is about Rs 1,000 lower than the recent high. Market analysts bet on more correction in coming future which gives investors a good opportunity to invest in gold.
Corrections in both global and domestic markets created a great opportunity for investors to accumulate gold in their portfolio this festive season before a possible rebound.
"The current price correction offers an opportunity for investors and individual consumers to buy gold ahead of a possible rally based on strong fundamentals. In fact, the downside is very limited in gold. Prices are expected to rebound from the current level," Business Standard quoted Gnanasekhar Thiagarajan, Director, Commtrendz, a city-based equity trading and research analytics firm, as saying.
The ongoing geopolitical tension between the United States and North Korea and on the domestic front the rise of inflation made investing in gold a safe bet. The current price made it a good investment avenue against all odds.
Strengthening dollar against major global currencies and as traders pulled out money in a short-term move made global gold price slump from $1,350 an oz to $1,265 an oz. India gold fell by about 3 percent from Rs 30,500 per 10 grams to Rs 29,550 per 10 grams.
"Fundamentals for gold continued to remain supportive. So, the current price decline is, in fact, a good opportunity for investors to book gold before its price starts moving up," Jayant Manglik, President, Religare Securities, told the business daily.
Reserve Bank of India (RBI) has forecast that inflation will increase in last week's monetary policy meeting. High inflation will further pull down the value of Indian currency against US dollars. And any depreciation in the rupee would make imported commodity costlier in local currency, thus gold would become costlier going forward.
"Since the GST council rescinded it's August notification, the cash purchase limit has gone back to its earlier level of Rs 200,000. So we advise our customers to buy gold now before its price shots up," said Kumar Jain, Director, Umedmal Tilokichand Zaveri, a bullion dealer and jewellery retailer in Zaveri Bazaar in Mumbai.