Rephrase the title:Gold could see profit taking as it hits another new lifetime high

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  • Gold prices zoomed as the US Fed maintained a soft monetary policy outlook, driving a fall in the dollar.
  • Experts however sound caution as the metal hits a fresh high for the second time this March.
  • Fresh buys can wait and some profit booking can be done at these levels, say experts.

Gold prices hit another high on Thursday to ₹66,778 per 10 grams on the MCX on Thursday morning trade. As it hit a fresh high for the second time this March, the yellow metal might see profit taking, believe experts.

The metal’s prices zoomed as the US Fed maintained its outlook for a soft monetary policy, indicating three rate cuts this year. The yellow metal’s spike was supported a sell-off in the US dollar after the Federal Reserve decision.

“Markets are now pricing in a greater chance, around 70%, that the Fed will begin cutting interest rates at the June policy meeting, up from 55% before the Fed policy. The US Dollar declined, and international gold prices touched new highs in response to this dovish hold,” said Ghazal Jain Fund Manager- Alternative Investments, Quantum AMC.

Book profits, re-enter at a lower price, say experts

Experts however sound caution as the metal hits staggering heights. It was trading close to $2,225 per ounce in the international markets.

Gold futures also increased 2.12% to $2,228.60 per ounce in New York. In India, contracts for April delivery rose 1.54% at ₹66,764 per 10 grams as investors built fresh positions.

“We see some signs of caution, as well as their (Fed’s) projections, show an upward revision in economic growth to 2%, core-PCE inflation at 2.6% and an unemployment rate of 4% year-end, which would make their rate cut task a little difficult,” observes Pranav Mer, VP, EBG – commodity & currency research at JM Financial Services.

So much so, that a few even advise investors to book some profits at these prices. “While the fundamental backdrop of lower interest rates and geopolitical uncertainty looks supportive for gold, some profit-taking can be done at these levels. Fresh buys can wait for price dips,” says Jain.

Agrees Mer, “Although we still maintain a positive in gold, we do expect some profit-booking, which can give us an opportunity to enter at a lower level.”

Most analysts peg gold’s support levels at around ₹66,000/10 gm, though they believe that it has long-term potential to hit anywhere between ₹67,450-₹67,900.

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