The bulls thrust gold to a record high above Rs 50,000 per 10 gm on July 22 while bears fill volatility on D-Street after five-days of the up move.
The Sensex ended July 22, 58 points lower at 37,871 and therefore the Nifty fell 29 points to 11,132.
The Indian market recouped most of their losses towards the close of trade, which suggests buying at lower levels, but experts feel the volatility is probably going to continue.
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The rally in gold and volatility within the equity market might be related.
“Gold has mobilized to record highs above Rs 50,000/10 gram reflecting firmness within the international market amid sharp losses within the dollar, additional stimulus measures and robust investor inflows,” Ravindra Rao, VP- Head Commodity Research at Kotak Securities. “Rising virus cases and US-China tensions have also support gold prices.”
The Indian equities remained quiet thanks to a muted trend seen in global markets amid an increase in COVID-19 related cases also as US-China tensions. Investors preferred to book profits at higher levels after five straight days of the up move.
“Domestic investors discharge select stocks after US equity futures fell through political tensions between the US and China. This led to a sudden decline within the local market,” Shrikant Chouhan, Executive vice chairman. He awaits the Nifty to weaken if it drops below the 11,050 levels.
The next big queries is what should investors do now? Is time to travel short or stay put?
Market participants are of the view that traders can avoid creating fresh long positions and await an opportunity above 11,232 levels while an in depth below 10,990 might be seen because the first sign of weakness.