Gold rate today jumps after SVB First Citizens Bank deal. Experts give buy tag with ₹68,000 target for long term


Today’s gold rate: Due to the eased bank crisis in the US, gold prices today soared in early morning trades. On the Multi Commodities Exchange (MCX), the April 2023 gold future contract opened with an upside gap at 58,718 per 10 gm levels and later reached an intraday high of 58,742 per 10 gm. The price of gold in the international market started out flat but quickly gained traction and reached an intraday high of $1,964 per ounce levels.

Bulls have been paying close attention to the current silver rate in morning dealings. The MCX’s May 2023 white metal contract opened higher than expected and reached an intraday high of 70,190 per kilogramme. In spite of some sell-off pressure, the price of silver is maintaining levels above $23 per ounce on the global market.

Commenting about the causes of today’s increase in the price of gold and silver, market expert Sugandha Sachdeva stated, “Given that gold has struggled to maintain prices above the critical threshold of $2,000 per ounce and Rs. 60000 per 10 gm, selling pressure has begun to set in. Investors have flocked to gold as a safe haven in response to the current instability in the US and European financial sectors, driving prices to record highs on local markets.”

Focus on SVB First Citizens Bank transaction
Sugandha Sachdeva said when asked about the SVB deal’s potential short-term impact on the price of gold: “The markets’ risk aversion has returned as a result of the banking sector’s stress relief, which has reduced demand for safe-haven assets like gold. Some investors’ concerns about a worsening crisis have been allayed by the news that US lender First Citizens Bancshares Inc has acquired the assets of the struggling US Silicon Valley Bank. The short-term forecast indicates that gold will continue to be under pressure as it approaches Rs. 58000 per 10 gm.”

anticipating a recovery after booking profits, Senior Commodities Research Analyst at Swastika Investmart Nirpendra Yadav stated, “Yesterday, profit booking in precious metals was maintained by the US government’s increase of emergency lending facilities and the indication of stability in the banking system. The demand for safe haven, however, is being pushed up by rising gold imports in top customer China and persistent recession fears in the US economy. Before the US CB Consumer Confidence data, which is being watched closely today due to banking upheaval, gold prices are anticipated to be range-bound.”

Sugandha Sachdeva said on the short-term future for gold and silver metals “The short-term forecast predicts additional pressure on gold as it approaches the threshold of 58,000 USD per 10gm. However, on a weekly basis, silver prices have been unable to close above the crucial resistance level of $23.50 per ounce or 70,500 per kilogramme, which may cause some corrective swings in the near future. Silver’s support level is set at $22 per ounce or $68 per kilogramme.”

Target of 68,000 per 10 gm is in view.
ICICI direct study advises long-term investors to profit from the short-term decline in gold prices “As it is observed resolving past its all-time highs of September 2020 (56,018), the structural upward trend in gold prices is still visible. Prices in the process have produced a breakthrough above the longer-term consolidation of the previous two years (56,000 to 44,000 per 10 gm), indicating an extension of the upward trend.”

The firm went on to say that there is a secular upward tendency in gold prices worldwide, noting “We have seen over the past 50 years that greater upward trends in the price of gold have often persisted for four to five years. We are in the middle of the present rise in the given environment. For a few more years, we anticipate that markets will keep up their current pace and upswing.”

Regarding a recommendation to long-term investors regarding the price of gold, ICICI Direct stated: “Given the recent broad range breakout (from 56,000 to 44,000) and the value of the rising supply line connecting the major annual highs of CY12 and CY20, the strong price structure on long-term charts leads us to believe that prices will rise significantly towards 68,000 levels over the next two to three years. Investors should thus keep making investments in order to profit from the multiyear uptrend.”

Disclaimer: Currency Veda does not endorse the opinions or suggestions expressed above by specific analysts or brokerage firms. Before making any investment decisions, we advise investors to consult with licenced professionals.