Gold prices may slip below Rs 45,000. Should you buy or wait for further correction?

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Gold prices in India moved lower in the early session on March 2 as analysts believe that risk-on sentiment on prospects for stimulus and a vaccine-fuelled economic recovery has dimmed the appeal of safe-haven assets.

India Gold MCX April futures were trading with over 0.5% loss in early trade tracking the muted trend in the international spot prices. Silver May futures were trading with higher losses of more than 1.5% in morning trade.

On the Multi-Commodity Exchange (MCX), April gold contracts were trading lower by 0.57% at Rs 45,050 for 10 grams, while May silver futures were trading 1.5% lower at Rs 66,351 a kilogram.

Experts said the rising US 10-year bond yield and the strength in the US dollar has eased the safe-haven appeal in precious metals.

Hareesh V, Research Head Commodities at Geojit Financial Services, said, “A rally in global equities on economic optimism, strengthening of US dollar and a retreat in US treasury yields continue to hit the safe-haven status of gold and thus the price of the commodity. Meanwhile, hopes of fiscal stimulus measures from the US offer lower-level support to the metal”.

Physical gold demand in India has been buoyant as local prices have dropped to their lowest levels since June last year. Also with the marriage season underway, people have been flocking to jewellery shops to take the benefit of lower prices.

On the outlook on gold and silver prices, Anuj Gupta, Deputy Vice President, Commodity and Currency Research said, “Gold and Silver are expected to go down on the back of rise in dollar. For today traders can go for sell in gold at Rs 45,300 levels with the stop-loss of Rs 45,700 for the target of Rs 44,500 and they can also go for sell in silver at Rs 68,000 with the stop-loss of Rs 68,800 for the target of Rs 66,500 levels”.