Ahead of Akshaya Tritiya, the day traditionally many Indians consider auspicious for buying gold, analysts have advised investors/households, to be cautious as they expect gold prices to go down.
As per them, the improving global macro-environment with the US-China trade tension ebbing and the resultant tailwinds for other asset classes may bring down demand for the safe-haven asset.
The metal has been witnessing continuous rally so far this fiscal, gaining over 30% YTD. The metal had crossed the psychological mark of `1,00,000/10 grams or $3,500/ounce (one ounce is 28.35 grams) last week. Since then the prices have fallen to $3,325/ounce by Tuesday evening on the CME.
Indian households own over 25,000 tonne of gold in jewellery form and a few temples, especially those in the South, own another 5,000 tonne. As per Smallcase, gold price is set to range between a 7% decline and a 3% gain this year, saying data indicate a potential for 3-7% increase in gold prices by 2026 Akshaya Tritiya.
Offering a price comparison on the Akshaya Tritiya days in the past 10 years, Pankaj Singh, manager at Smallcase, said gold price has increased by 166.79% in past 10 years.
Gold was at `26,800 (-7%) in April 2015’s Akshaya Tritiya, which rose 10% in the same day in May of 2016 to `29,600, declined 2% in April 2017 to `29,100; rose 6.5% in April 2018 to `31,000, gained 5.5% in May 2019 to `32,700, rallied 41% in April 2020 to 46,000; added 4.1% in May 2021 to `47,900 and in April 2025 at `96000 or 34% YoY gain.
Many analysts are expecting a steep correction in prices to the tune of 7-10% from the present levels —gold was trading `4,000 less than the historic peak last week when it along with GST crossed `1,06,000 mark. Brokerage Motilal Oswal has given a `1,06,000 target for the medium to long term for the metal and has given a buy call on dips. “Technically, from medium to long term perspective we see support near `90,000-91,000, and resistance near `99,000/10 grams.”