Gold slips well below January record; Rs 1 lakh level seen as unlikely, experts say

Gold prices in the Indian and international markets have come down considerably from their highs over the past few months. The metal has recorded a sizeable fall from its record high in January. With the festival and wedding season approaching, buyers are wondering whether gold will get cheaper still.

Several global factors are being cited for the decline. Investors booked profits after prices hit a high. There is also uncertainty in the United States over inflation and interest rates. These factors have put a brake on the rally in gold.

The real yield on American bonds has risen and the dollar has strengthened. This kept up steady pressure on gold in the international market.

Will gold fall straight to Rs 1 lakh? Experts say that reaching this level is very difficult for now and almost impossible. For the Rs 1 lakh level to be seen in the Indian market, the international price of gold would have to fall below $2,800 an ounce.

However, several strong structural factors, such as geopolitical tensions, continued gold purchases by central banks and de-dollarisation, are supporting gold. Prices may see some ups and downs in the short term, but there are no signs of a big fall to Rs 1 lakh at present. Even so, if that did happen, it would be a drop of Rs 50,000 from the current Rs 1.50 lakh, bringing the price to Rs 1 lakh.

Is it right to invest in gold now? The Reserve Bank of India (RBI) has recently changed the repo rate. Since then, the bullion market has seen a somewhat mixed but fresh uptick. According to experts, given the softening and stability in gold prices, buying gold at current levels could be beneficial.

Experts also say that, compared with other investment options, the stock market and mutual funds have not delivered the expected returns for some time, while bank fixed deposit (FD) rates are limited. In such a situation, investing in gold in instalments, through a systematic investment plan (SIP), with a long-term view of 4 to 5 years could be safer and more beneficial. With gold's outlook bright, investors should think about it seriously.

This information is based on material available on the internet and should not be taken as investment advice. Consult an investment expert before investing in gold or anywhere else.