Today, the gold rate faced significant selling pressure following the announcement of the Union Budget 2024. Opening at ₹72,838 per 10 gm on the Multi Commodity Exchange (MCX), the gold price initially appeared stable. However, after Finance Minister Nirmala Sitharaman revealed a reduction in customs duty on gold and silver from 15 percent to 6 percent, the market reacted swiftly. The MCX gold rate plunged to an intraday low of ₹68,500 per 10 gm, marking a loss of ₹4,218 during Tuesday’s trading session. Despite this, the yellow metal saw value buying, recovering some of its losses as the day progressed.
According to commodity market experts, the current dip in gold rates reflects the market’s response to the new duty structure. They point out that the gold rate today has crucial support at the ₹68,000 per 10 gm level, presenting a potential buying opportunity at these prices. Once the market adjusts to the new customs duty, gold prices may rise again, indicating that the current decline could be temporary.
Reasons Behind the Gold Rate Drop Post-Budget 2024
Connecting the gold price crash to Budget 2024, Sugandha Sachdeva, Founder of SS WealthStreet, explained, “As an immediate impact, the announcement has led to a sharp corrective move in the prices of gold and silver, reflecting market adjustments to the new duty structure. Further, in the short term, we may witness additional downside in gold and silver prices as the market fully absorbs the impact of the duty reduction. Investors might initially react with caution due to the immediate price volatility. However, the overall sentiment could stabilize as the longer-term benefits become more apparent.”
Anticipating a rebound, Anuj Gupta, Head of Commodity & Currency at HDFC Securities, said, “The reason for the crash in gold price can be attributed to the reduction in basic customs duty (BCD) on gold and silver. So, the dip is temporary, and global triggers like US Fed rate cut buzz, sliding US dollar rates, etc. It would soon start playing its role. So, the falling gold prices can be a good opportunity for bottom fishing, but in bits. One should maintain a buy-on-dips strategy till MCX gold is sustaining above ₹67,800 per 10 gm mark.” He added that the spot gold price remains within the $2,400 to $2,450 per ounce range, and a trend can be predicted based on a break in either direction.
Gold Price Outlook
Regarding today’s MCX gold rate outlook, Sugandha Sachdeva of SS WealthStreet commented, “Gold and silver remain in a structural uptrend, yet some near-term correction is highly likely, which could present buying opportunities at lower levels. We foresee near-term support for gold at ₹68,000 per 10 gm. For silver, we anticipate support at ₹82,000 to ₹80,000 per 10 gm.”
The recent plunge in gold prices following Budget 2024 provides a potential buying opportunity for investors. With the gold rate today stabilizing around ₹68,000 per 10 gm, those looking to invest might consider this an opportune moment. However, consulting with certified experts before making any investment decisions is crucial to navigating the volatile market conditions effectively.
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