Gold Price Could Surge To Rs. 70,000 This Year, Predict Market Analysts
The gold price surged significantly in 2023, surpassing the $2,000 mark, as investors saw it as a safe haven, with a diminishing trend seen in the US dollar and Treasury yields on the back of the U.S. Fed”s dovish stance.
Meanwhile, analysts at ICICI Direct have predicted a further hike, as according to them, gold will reach a new high of Rs. 70,000 in the coming days. “Gold prices are likely to rise further on the back of a weak dollar and a decline in US Treasury yields. The dollar and yields nosedive in anticipation that the US Fed will start cutting rates as soon as March 2024,” the report said, according to the LiveMint.
The report attributes the further hike to rising concerns over slower global economic growth and escalating geopolitical tensions in the Middle East. Moreover, central banks will continue buying gold in order to diversify their reserves for hedging against uncertainties.
Currently, the yellow metal is trading on the MCX commodity stock exchange at Rs. 63,060 and approximately $2,058 per ounce in the global market, while the rupee is trading above 83 against the US dollar.
Global central banks purchased ~337 tons of gold in Q3CY23, the second-highest third quarter on record. Moreover, central banks have purchased 800t of gold this year so far, which is 14% higher compared to the same period last year, the report said.
“Looking at the current situation, the central bank will continue to add gold to diversify its reserves,” a report said, quoting analysts.
Whereas total gold ETF holdings saw a downturn in 2023 due to rising interest rates, which diverted investors” attention away from gold. “We believe fresh investment demand may kick in 2024 amid weak dollar and expectation of rate cuts across major economies. Further, investors will buy gold as store value amid escalating geopolitical tensions in the Middle East and ahead of elections in major economies including India and the US,” ICICI Direct said in its report.
