Gold continued to shine as the yellow metal hit a new record high on August 5, with equity markets booking higher profits. India Gold has crossed the Rs 55,000 per 10-gram market, and experts expect the rally to expand to Rs 65,000 per 10 grams in the next 12-15 months if the momentum continues to pick up.
Gold and silver have performed best so far this year with returns of 40 percent and 50 percent respectively.
Kishore Narne, Head – Commodity & Currency, Motilal Oswal Financial Services:
“An aggressive stance of central banks to push unprecedented amounts of liquidity and keeping interest rates lower coupled with reignited trade-war concerns and rising COVID-19 infections provide a convincing fundamental backdrop for continuation up-trend in both precious metals,” Kishore Narne, Head – Commodity & Currency, Motilal Oswal Financial Services said.
“We continue to be bullish on Gold with potential targets between Rs 65,000 to 68,000 /10gms and Silver expected to reach anywhere between Rs 82,000-88,000 over the next 12-15 month period, we continue to recommend investors to keep a higher allocation towards Gold and use every dip to accumulate the metal,” he said.
The Indian market ended mixed on Wednesday as investors preferred to book higher levels of profits and uncertainty revolved around the outcome of the RBI policy meeting.
Let’s look at the final number on the D-Street on Wednesday – the S&P BSE Sensex fell 24 points to 37,663, while the Nifty 50 rose 6 points to close at 11,101.
Ajit Mishra, VP – Research, Religare Broking Ltd.:
“Markets ended almost flat amid volatility as participants preferred to book some profit at higher levels. Initially, firm global cues led an upbeat start, and follow up buying in the select index majors pushed the index higher in the early trades,” Ajit Mishra, VP – Research, Religare Broking Ltd. said.
“However, caution ahead of the RBI meeting outcome triggered profit-taking as the day progressed, which eliminated all the gains. Consequently, the Nifty ended flat at 11,100 levels (up by 6 points),” he said.
While metals, auto, and consumer durables were the biggest gainers, there was a mixed trend in the energy and power lagging sectors. Interestingly, broader markets ended with good gains in the range of 0.4-0.9 percent respectively.
We have expert opinions on what investors should do when the market resumes trading on August 6:
Sahaj Agrawal, Head of Research- Derivatives at Kotak Securities:
We remain positive and hope that the uptrend will continue above 10900 and 11500-11600. If the index goes back to 10900, it rejects short-term compatibility, thus opening the gates for trouble 10700.
Banking and capital goods are in the cumulative zone and receive moment; The midcap space is expected to be consolidated.
Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan by BNP Paribas:
The pullback, which began on August 4, extended beyond the 61.8% resumption of the previous fall. When it tried to reach the 78.6% retracement mark, the index came under heavy selling pressure.
As a result, the Nifty fell into negative territory and eventually posted a positive. Structurally, the following movement appears around the corner, which pushes the Nifty down to 10882 swings. On the other hand, today’s high of 11225 serves as a key resistance.
Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in:
The Nifty 50 seems to be in Pause mode as it drops nearly 1 percent of gains from intraday. 11225 levels, setting up some kind of uncertain spinning top before signing the session.
In the next trading session, it is very necessary for this counter to stand above 11064 levels to maintain a positive bias. If it slips above the stated levels, it could attract selling pressure on an intraday basis. With targets between the 11013 – 10950 levels.
In that scenario, one can expect sideways consolidation as long as the Nifty is above 10900 levels. However, this trend will not change in favor of the Bears as long as the Nifty is above its 200-day moving average of 10855 levels.
In contrast to this strength, it will start back above 11225 levels, which will help the Nifty to finally test the recent swing high 11341 levels. Currently, traders are advised to remain neutral on the index by following a stock-specific approach.
Nagaraj Shetti, Technical Research Analyst, HDFC Securities:
The high volatility in the market on Wednesday did not hurt the positive sentiment created by Wednesday. As the short-term trend continues and a steady movement beyond the 11200-225 levels could open the 11350’s next reversal levels.
The positive chart pattern of highs and lows in the market continued and the last sessions are considered to be the high bottom of the low swing order of 10882.
According to this model, one can expect the Nifty to move upwards and re-test the swing height of 11340 levels in the near term. The daily 14 periods are kept on the edge of the RSI 60. With more than 60 its steady movement the market will be further upside down.
The short-term trend of the Nifty continues to be positive. Volatility is expected to continue for the next session (RBI policy statement). The result of this event can ignite a sharp intraday movement on both sides.
One can hold long positions with a stop loss of 10900 levels and a steady movement beyond the 11200-11225 levels. It is expected to pull the Nifty towards 11350 in the near term.