Mumbai: Gold, always considered a safe haven for investment in uncertain times, is likely to glitter more and even soar to Rs 63,000 per 10 grams next year amid expectations of fresh stimulus measures and weaker American dollar.
In 2020, the economic and social uncertainties triggered by the coronavirus pandemic turned the spotlight on gold as a safe haven. The price of the yellow metal reached an all-time high of Rs 56,191 per 10 grams at MCX and USD 2,075 an ounce in the international market in August.
A sharp turn in global monetary policies that led to a low interest rate scenario and unprecedented liquidity, which began in mid-2019, gave a boost to gold price in all major currencies, making the yellow metal attractive for investors.
HDFC securities Senior Analyst (Commodities) Tapan Patel said the yellow metal is likely to remain bullish next year with targets of USD 2,150 and USD 2,390 in COMEX gold and Rs 57,000 and Rs 63,000 at MCX on concerns over global economic recovery.
“The slower pace of revival of economic activities and labour market growth along with higher amounts of stimulus measures will continue to remain driving factors for gold prices,” he added.
In 2020, he said that gold prices in India got an additional support from rupee depreciation against the dollar during the year as spot rupee was down by around three per cent year-to-date.
Further, the sharp decline in US equity indices in the first half of the year and the fall in real yields drove investors out of dollars which boosted buying in gold, he added.
World Gold Council Managing Director (India) Somasundaram P R said high prices and logistical issues due to lockdowns affected consumer demand in all consuming markets.
Demand was down 49 per cent in India till September quarter making it one of the lowest in WGC”s data series, he said.