Gold prices set to rise this year, good time to buy now: Experts

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Updated: March 27, 2019 9:20:40 AM

Gold gains as US recession fears lift safe-haven appealGold price to rise over one year, a good time to invest now, say experts

This is a good time to buy gold after the US yield curve inverted last week for the first time since mid-2007 signalling towards recession in the world’s biggest economy. Experts expect gold prices to go up in the next 12 months on global growth concerns.

Amid the US-China trade war, Brexit and possibilities of a slowdown in Europe and China, the precious yellow metal has found favours among investors in the last six months. According to the experts, it has been showing signs of bullishness since last six months as the dollar index hasn’t moved much and other global issues will likely linger for some time, making it favourable among investors.

“The general tendency for gold will be on higher side this year and next year possibly. From the calendar year perspective 2019, we can expect spot gold prices to touch around 1,400$ per troy ounce. As far as domestic prices are concerned, from the calendar year perspective, we expect prices to touch around Rs 34,500 per 10 grams and one year perspective from Mar to Mar we expect prices to touch 1460$ per troy ounce and domestic prices to touch Rs 36,000 per 10 gram, an all-time high,” Amit Sajeja, Associate Vice President, Motilal Oswal, told Financial Express Online.

According to Sajeja, one can resume accumulating gold from today. Currently, the price of gold is around Rs 32,000 per 10 gram and may not fall below Rs Rs 31,000 per 10 gram and in dollar terms, the current prices are $1,315 per troy ounce and one can accumulate till $1280 troy per on the lower side.

According to the experts, investors will also keenly watch data relating to Q3 final GDP, Core PCE index and personal spending. Brexit event will also be important as UK Prime Minister will be important and the vote would trigger more volatility for Pound and gold prices. On the domestic exchanges, weakness in rupee could keep the prices elevated at higher levels and for the week could quote in the range of ₹31,550 and ₹32,550.

“Brexit related concerns may support the yellow metal going ahead. Last week US posted weak manufacturing PMI  so traders will closely monitor building permit, housing start & consumer confidence data. Moreover, the Indian rupee has appreciated due to consistent FII inflows and on optimism of NDA retaining the power. Hence, gold on the MCX may not rally as much as it has rallied in the international market,” Jigar Trivedi, research analyst of Anand Rathi told Financial Express Online.

According to the market experts, the government’s gold bond scheme and gold monetization scheme couldn’t trigger interest among people on account of lack of financial literacy. It would take around 5-10 years for the government to change the attitude of common people towards gold. However, in the last eleven months, there has been a decrease in the import of gold.

 

Please consult your financial advisor before making any investment decisions.

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