Gold rates have fallen on Thursday, but should you buy now or wait?
Gold prices, which have been surging on the back of the worldwide economic fears, faced a possible reality check on Thursday.
The price of the yellow metal came down by Rs 368 per sovereign to Rs 28,768 in Chennai. The drop per gram was Rs 46 - to Rs 3,596.
It was a significant fall and bucked the trend at a time when gold prices have been rising steeply on increased safe-haven demand amid central bank easing, slowing economic growth and the US-China trade war.
Gold futures also traded lower on Thursday as did gold for delivery in October. Analysts attributed the fall in gold futures to profit booking by investors.
Gold demand set to rise and prices set to fall?
Jewellers are increasingly hopeful that the demand for gold will rise in the October-December quarter as the prices of the yellow metal have historically fallen right before the wedding season and festive season, a time when buying gold is considered auspicious.
It is a view echoed by noted Indian commodities expert Gnanasekar Thiagarajan for reasons other than just a rise in demand.
"There is definitely pressure on gold because there is a lack of safe-haven demand. Risk appetite has improved and equity markets overseas have started going up. That has diminished the safe-haven premium right now," he says.
Thiagarajan predicts more good news for prospective buyers.
"We may see it coming down by about Rs 700-1000 within a few days," he adds, saying, "In India, it will be a blessing in disguise ahead of the festive season."
The big takeaway: "You can wait to buy gold but not for too long."
But then comes the note of caution.
" If there is global uncertainty in the future, the safe-haven demand will be revived again. As of now, we are in the profit-booking mode as far as gold is concerned," Thiagarajan says.
Long-term investors in gold at least needn't wait to invest according to him.
"My grandmother has been saying this for ages - there is never a good time to buy gold. For longterm investors, any level is a good level as there is a lot of scope for an upside," he stresses.