New gold bull market has begun, says report; prices likely to hit Rs 40k-mark by Diwali

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Published: August 18, 2019 5:30:26 PM

The price for the precious yellow metal is likely to accelerate to Rs 40,000 per 10-gram mark by Diwali on the back of the decline in global growth rate and the ongoing trade war between the US and China

Gold hits all-time high, nears Rs 38,000; silver surges Rs 650The RBI said that a rise in demand for safe-haven has pushed gold prices up. Image: Reuters

The price for the precious yellow metal is likely to accelerate to Rs 40,000 per 10-gram mark by Diwali on the back of the decline in global growth rate and the ongoing trade war between the US and China, according to analysts. This will be up from the October contract of gold priced at Rs 37,995 per 10 gram at the Multi-Commodity Exchange.

Gold’s demand “may slow down slightly due to some easing in trade tension between the US and China, but over the trend is negative. We see gold prices around ₹39,000 to 40,000 per 10 gram by Diwali,” IANS reported citing Anuj Gupta of Angel Broking as saying even as he maintained that the prices were going up majorly due to the fall in global growth rate.

However, experts pointed towards heavy profits ahead for investors investing in precious metals today even as the bull market has started. “We believe the bear market in gold has run its course and a new bull market has begun,” said a report by Goehring & Rozencwajg. All investors, according to the report titled The Gold Bull Market is Here, should have ‘significant’ investments in precious metals and related equities while for those making their precious metal investments today, “profits could be huge as we progress throughout the coming decade.”

“Gold prices on MCX gained to mark another new lifetime high on strong safe-haven demand amid political tensions in Hong Kong, also support seen as Indian Rupee dropped to test 71.3975 on futures. The pro-democracy protests in Hong Kong continued, and China asked Western diplomats not to interfere in Hong Kong. There may be disruption in the global markets, especially after several flights were cancelled due to the protests,” Ajay Kedia, Director, Kedia Commodity had told Financial Express Online last week. 

Earlier this month, in its monetary policy, the Reserve Bank of India said that a rise in demand for safe-haven amid increasing downside risks to growth and a worsening geopolitical situation has pushed gold prices up since the last week of May.

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