Nifty-Gold Ratio Sees Significant Jump Amid Slowing Oil and US Dollar Trends

Nifty 50-Gold Ratio Sees Improvement The Nifty 50-gold ratio has witnessed an improvement, reaching close to 1.60 after hitting 1.50 last week. This recovery is attributed to a 250-point rally in the Nifty 50 index and a decline in gold prices from ₹1,55,000 per 10 gm to ₹1,47,000 per 10 gm this week.

Market Dynamics Market experts note that both gold and equities are moving in tandem, tracking the US dollar and oil prices. The rising US dollar rates have capped the gold price rally despite the uncertainty caused by the US-Iran war. Similarly, equities have come under selling pressure due to surging oil prices, renewing inflation fears and fueling concerns about weak quarterly results from companies.

Nifty-Gold Ratio Signal The Nifty-gold ratio pivot point is 2.50. When the ratio is below 2.50, investors generally buy equities. Conversely, when the ratio is above 2.50, investors buy gold. However, market experts caution that the Nifty-gold ratio technique should not be used as a definitive guide.

Market Outlook Despite the improvement in the Nifty 50-gold ratio, equities are expected to remain under pressure due to the ongoing US-Iran war and its impact on the global economy. Gold prices are expected to gain faster than equities in the short to medium term, as the supply of oil may remain affected. Market experts recommend buying gold in the current market scenario, as oil and US dollar rates are expected to fall further, and the tension caused by the US-Iran war is expected to soften.

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