Time to hunt for fortune as gold begins to shine

MUMBAI: After a spell of subdued trading, gold is likely to slowly enter bullish phase, according to analysts and traders who feel it could be a good buying opportunity. "One should buy at every dip in price...it will touch Rs 9,000 per 10 gm," said Riddisiddhi Bullion’s Prithviraj Kothari.

After touching a high of $679 per ounce earlier this month, Comex August futures dropped to $647. Thereafter, prices have been rising. Even international spot prices softened to $643 from $674 and then started rising. Spot gold was at $661.15 in morning trade on Wednesday.

In the local futures market, the August contract on MCX touched Rs 8,986 per 10 gm few weeks ago, came down to Rs 8,721 on June 12. Thereafter, the futures rose and on Wednesday 4.30 pm it was trading at Rs 8,850.

"We continue to hold a bullish view as we expect buying support to come at low levels. $665 remains a crucial level and if spot gold closes above $665 for the day it would touch as high as $672-$675," said Man Financial Commodities’ Ashish Karel.

Fundamentally, the market is supportive with easing concerns over central bank selling. This may tighten supply and increase gold buying through ETF from the beginning of this week, Mr Karel added. Besides, there could be support from seasonal demand for gold and silver.

However, according to Bombay Bullion Association president Suresh Hundia, the best buying is between Rs 8,550 and Rs 8,650. "Gold touched Rs 8,550 10 days back and soon it will dip further before rising," Mr Hundia said. He said gold demand was good and more then 1,000 kg was sold at Mumbai, but the demand has fallen in the last two days to 600-800 kg.