Money making idea: Should you buy Gold? 54% gains expected in three months, experts give thumbs up

On account of surging crude oil prices in global merchandise and US Federal Reserves’ view to keep interest rates unchanged, gold prices are likely to break its immediate resistance at Rs 33,300/10 gms at the Multi Commodity Exchange (MCX) and move forward towards Rs 33,800 to Rs 4,000 per 10 gram prices in short-term (two to three month), say experts. Currently, the MCX gold future for April expiry is at around Rs 33,200/10 gm levels. Since the margin money required for the gold investment is 5.25 per cent of the lot size (1 kg) means around Rs 1,75,000 and on this investment return could be in the range of Rs 80,000 as Rs 1 surge leads to Rs 100 gain in gold investment at MCX.

Speaking on the gold outlook Anuj Gupta, Deputy Vice President — Commodity and Forex research at Angel Broking told Zee Business Online, "The crude oil prices in the global markets are surging due to the sanctions on Iran and Venezuela and output cut by Russia. This would put pressure on the Current Account Deficit (CAD) of the Indian economy as the majority of India's oil demand is being met through imports." He said that pressure on CAD would lead to lowering of the Indian rupee against the US dollar, which is expected to fuel the gold prices in domestic markets.

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Anuj Gupta of Angel Broking said that gold is facing resistance at Rs 33,300 which would be broken soon at the MCX and then the gold prices would head for Rs 33,800 to Rs 34,000 per 10 gms of gold at the MCX in two to three month time.

Expecting positive moves in gold prices at the MCX Manoj Kumar Jain, Director — Commodities at IndiaNivesh told, “We expect gold prices will gradually move in a positive direction and if it is able to cross the important hurdle of $1332 than possibly it will test $1,350-1,360 levels again."

Elaborating upon the domestic reasons for rising in gold prices Manoj Jain of IndiaNivesh added, “In India arrival of Rabi crops from February to April and marriage season will also push demand of gold jewelry. Those who are looking to invest on the auspicious day of Akshya Tritya this is a good time to accumulate gold from current levels and at the time of auspicious day of Akshya Tritya they sell gold and convert into gold jewelry."

Asked about the investment strategy in gold Anuj Gupta of Angel Broking told, "Gold has immediate support at Rs 32,800 and strong support at Rs 32,500 per 10-gram levels. Since the margin money required for investing in gold at MCX is 5.25 per cent of the lot size, it would require Rs 1.75 lakh portfolio to make an investment in gold at MCX."​