As the festive seasons start in India, Diwali is the most auspicious festival of every Indian. According to Indian psychology , Gold and festivals, together made a perfect blend, to celebrate the festival like Diwali. Dhanteras is the first day of the Diwali festival that falls one or two days before Diwali. This is also known as Dhanatrayodashi. The word "Dhan" means "wealth" or a form of precious metal which is a sign of good luck and prosperity. This is the most propitious occasion for buying gold, silver and other precious metals.
Gold is the most valuable and remarkable metal all over the world. Investors want to invest in the bullion to earn profitable results. As per the World Gold Council, the demand for gold in the country is increasing. Gold demand in India during the second quarter of 2019 (Q2CY19) was 213.2 tonnes, a 13 percent increase over 189.2 tonnes in the same quarter of 2018. In value terms, demand in Q2CY19 was quoted at Rs 62,422 crore, up 17 percent compared to Rs 53,260 crore in Q2CY18.
- Due to declined GDP growth which signaling slows down in the economy.
- Delay in Brexit deal, creates uncertainties in the market and investors shifted their focus from equity class to safe-haven gold.
- Geopolitical trade tensions between the US and China.
- The rise in hopes of FED rate cuts in its upcoming FOMC meeting, which will be held at the end of this month could weaken the dollar that could support yellow metal prices.
- Rising gold prices may influence the gold demand in the longer run.
- An increase in the unemployment rate, making difficult to invest in gold.
The yellow metal is trading at 38035. It is sustaining below 50 days and 200 days moving average which acts as a strong resistance level for the counter. Bullion seems like it is trading in a roller-coaster ride for the upcoming festive seasons. The major support levels are 37970 and 37700 and resistance levels are 38135 and 38235. RSI is trading at 53.09 which shows no sign of divergence. Gold metal may lose its shine during this dhanteras and diwali due to high import duty and surged prices. The weakening in demand may decrease the sales of the metal by 50% in the current year.
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