Gold price likely to touch Rs 52-53,000 in next 12 months: MOFS
Domestic gold prices are expected to touch higher levels of Rs 52,000-53,000 in the next 12 months. In 2021, the precious metal prices are trading between Rs 47,000 and Rs 49,000 per 10 grams. However, gold prices saw a rise of 52 per cent during 2019 and 25 per cent in 2020.
According to the Motilal Oswal Financial Services note, bullion has been in a consolidation mode from last Diwali to this Diwali, and the past few months have seen some volatility amid volatility in US dollar and bond yields.
Nevertheless, during the first half of the year, better-than-expected economic data and the US Federal Reserve’s bullish outlook have kept most market participants on edge. On the other hand, the second half has seen weaker data sets and a change in the US Fed’s outlook “which could once again excite the gold bulls”.
“Unlike Diwali 2020, this year there are very few restrictions, shops are open, this year there has also been an increase in the total demand which can be seen from the import numbers which is 740 tonnes till September.”
“Risk assets have seen a massive jump over the past few months and have delivered decent returns, and any change in trend or dilution could lead to a huge jump in safe havens – gold in particular.”
Recently, data from the World Gold Council suggested that gold demand rose 47 per cent to 139.1 tonnes for the quarter ended September 2021, as against 94.6 tonnes a year ago.
Further, jewelery demand in India grew by 58 per cent to 96.2 tonnes during the July to September 2021 period, driven by strong demand, occasion-related gifts, economic rebound and lower prices.
“The ETF hasn’t been the best supporter for gold since the beginning of this year, although the Central Bank’s gold buying spree and the CFTC’s position have maintained their position in the net long term, leading to an overall downside for gold prices. The feeling has increased.”
Further, the note said that there may be some short-term constraints in the current scenario which may give investors a better buying opportunity. “We believe gold has the potential to rise to $2,000 once again and create a new life span on Comex.”
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