New Delhi, Jun 26: With looming uncertainty and no likelihood of an early economic recovery in sight, the bull run in gold prices is here to stay. Analysts expect domestic futures to touch ₹ 52,000 per 10 grams in the next few months, till Diwali.
Experts also predict that with the current trend, gold may reach historic levels around ₹ 65,000 per 10 grams in two years time.
Futures of the yellow metal have touched new highs in India off late. On Wednesday, the August contract of gold futures on the Multi-Commodity Exchange (MCX) touched an all-time high of Rs 48,589 per 10 grams.
It has, however corrected since and is currently trading at ₹ 48,057 on the MCX, higher by ₹ 116 or 0.24 per cent from its previous close.
Market experts are of the view that both domestic and international gold prices are yet not done breaching records and will touch new highs in days to come.
The resurgence in the number of new cases of coronavirus infection across the globe has added to the uncertainty and fears.
Speaking to media persons, Anuj Gupta, DVP for Commodities and Currencies Research at Angel Broking, noted: "In short term we are expecting it to reach ₹ 48,800-49,000 and for long term, we are expecting ₹ 51,000-Rs 52,000 till Diwali."
On the prices in the international market, he said that it may reach around $1,790 per ounce in the near term from the current levels of $1,762 and the long term, it is likely to be around $1,820-1,850 per ounce.
Gupta noted that with International Monetary Fund's (IMF) latest downward revision of economic outlook, both global and of India, and the rising number of cases and high demand by gold exchange traded funds (ETF) have led to this record breaking rise in gold prices.
Covid-19 battered India's economy is projected to contract by 4.5 per cent this fiscal, according to the IMF and the global output is projected to decline by 4.9 per cent in 2020, 1.9 percentage points below the IMF's April forecast.
Hareesh V, Head of Commodity Research at Geojit Financial Services, said that gold's safe haven appeal will remain on the higher side as there is little hope of a quick global economic recovery amid rising virus cases across the world.
"Increased geopolitical instability and an under-performing dollar also lift the metal's sentiments," he added.
According to Prathamesh Mallya, AVP Research, Non-Agro Commodities & Currencies at Angel Broking, said that with the global output to contract and the economies in a deeper recession than most anticipate, gold as an asset class is a safe bet for investors across the globe.
"Although, the physical demand has declined drastically due to the restrictions and lockdowns, the activity of global central banks and their net purchases of gold signal that uncertainty will continue for most of 2020," he said.
He was also of the view that in the international market price of the metal may move towards $1,850 per ounce and in the domestic market it is likely to move higher towards Rs 50,000 per 10 grams.
"The investment demand as seen in the net additions of ETF holdings also signals that gold will shine for a much longer time even if the pandemic is under control. Till then, keep buying gold, if not in physical form, but in digital form," Mallya added.
Industry insiders like Aditya Pethe, Director, WHP Jewellers said: "I basically feel that the current trend for the gold is bullish and for the coming next 2 years, it is likely to move upwards. No one can predict the exact price as currently the trend is on rise but it might change after 6 months. In general for the coming 6 months to one year, the gold prices are likely to cross $2,000 which comes to roughly Rs 55,000. For a temporary moment it may reduce, basically fluctuate as well but overall trend of gold is going to be bullish."
On his part, Ishu Datwani, Founder, Anmol Jewellers said: "Yes - it's very likely that the gold price could easily go up to Rs 60,000-Rs 65,000 in the next two years. There is also a possibility of it going up even more."
"A lot of banks have been buying gold and there is also a possibility that the Indian rupee will depreciate against the dollar. This and geopolitical reasons will cause bullishness in gold."
Comments
But BJP was able to do it in UP and Gujarat since EC is in its pocket
After model code of conduct came into existence in Karnataka, Congress crooks are not able to distribute money (both black money & fake currency) freely to get people for Pappu rallies like before.
Why can’t the idiot understand that Kannadigas have no interest in meeting him to listen to his nonsense.
Because it is a BJP stronghold and naturally communally sensitive region!
"Rahul asked party workers not to brag about their achievements and the
achievements of ministers, but to focus on key issues of each region
that ensure victory"
Is there anything to brag? And, he is advising to focus on key issues, now, during the election time? What were they doing for last 5 years?
Congress has change for its own good. Party party hierarchy, should be strong. The party must have zero tolerance on Corruption in the name of Party funds. Collect money from ministerial aspirants and Chairmen of statutory boards. Why other parties speak lightly about Congress is due to situation that is prevailing in the Congress. Native Congressmen are sidelined with migrated defected leaders. No one is listening or giving chances to hear views. This time Congress will learn a hard lesson for sidelining devout and loyal Congress leaders and giving prominence of migrants. Even senior leaders like Mr.Jaffar Sheriff and Moily are sidelined. Mr. S.M. Krishna left the party due to not giving importance to his seniority or experience. Now one after the other will start leaving the Congress after out come of the elections in Karnataka.
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