Gold prices climb to 8-week high; is it time to invest in gold financiers?

The trend in Muthoot Finance's stock looks promising as it is trading well above the 200-days moving average (DMA) placed at Rs 1,059 levels

After witnessing profit booking early December, gold prices started the new year on a high by notching an eight-week peak after surpassing the key $1,900 level on Monday, as a surge in Covid-19 cases and prospects of tougher coronavirus control measures lured investors to the safe-haven metal.

Gold prices were mildly lower on Tuesday, down 0.33 per cent at $1,938 per ounce, after rising 2.5 per cent on Monday as the US dollar halted its slide ahead of Senate runoff elections in Georgia.

Back home, gold loan portfolio of CSB Bank increased by 60.36 per cent year-on-year during the third quarter (Q3FY21) to touch Rs 5,633.75 crore. Sequentially, the gold loan portfolio grew 14 per cent, from Rs 4,938.98 crore in the second quarter of the current fiscal,the lender said in a regulatory filing. The development has put gold financiers under investor radar.

So, should you invest in gold financiers? Here's what charts show:

Muthoot Finance Limited (MUTHOOTFIN): The stock of the NBFC has been trading sideways from mid-August 2020 with a breakout level placed at Rs 1,320, as per the daily chart. The trend looks promising as the counter is trading well above the 200-days moving average (DMA) placed at Rs 1,059 levels. Moreover, the Moving Average Convergence Divergence (MACD) is well placed above the zero line, suggesting a positive momentum ahead. The immediate support comes at Rs 1,200 levels. CLICK HERE FOR THE CHART
 
Manappuram Finance Limited (MANAPPURAM): The trend in the stock may remain positive as long as it manages to hold ground above the support of 50-weekly moving average (WMA) placed at Rs 150.40 levels. To breakout on the higher side, the stock needs to absorb all the selling pressure it is witnessing around Rs 180 levels. A firm close above Rs 180 may see the stock surging towards Rs 210 levels. CLICK HERE FOR THE CHART
 
State Bank of India (SBIN): The stock has recently crossed its 200-WMA, placed at Rs 273, triggering the upside bias towards Rs 320 levels. This move shall remain intact if the stock decisively closes above Rs 260 levels. The MACD has crossed the zero line on the upside which suggests that the momentum in the stock will remain positive in the coming sessions. CLICK HERE FOR THE CHART

Federal Bank Ltd (FEDERALBNK): The "Golden cross" on the daily chart suggests a bullish trend in the stock. The trend may remain intact till the stock defends the support of Rs 65 on a closing basis. Once this is decisively achieved, the stock may head towards Rs 74 and Rs 80 levels. Herein, the 100-WMA falls at Rs 74 levels. The Relative Strength Index (RSI) has made a positive crossover suggesting the strength shall remain strong in the short-term. CLICK HERE FOR THE CHART

CSB Bank Limited (CSBBANK): After breaching 50-WMA at Rs 237.30 levels, the stock witnessed heavy selling pressure. This resulted in breaching the support of 100-WMA on the downside, which has now become the resistance at Rs 229.50 levels. The stock now needs to scale 100-WMA and 50-WMA (placed at Rs 235) to encourage buying momentum. The counter may see aggressive selling build-up if the support of Rs 210 is broken decisively. CLICK HERE FOR THE CHART