The Indian gold market is abuzz with excitement as global uncertainties continue to drive investors towards safe-haven assets. As the US economy shows signs of slowdown, fears of a trade war escalate, and investors are seeking refuge in gold, the prices are poised to hit an unprecedented high.
Global Uncertainties Drive Investors to Gold
- The US economy is facing headwinds, with rising trade tensions, inflation, and recession concerns driving investors towards safe-haven assets.
- Global brokerage Goldman Sachs estimates that gold prices could reach $3,700 per ounce in the near term, and possibly touch $4,500 per ounce if trade tensions escalate further.
- Gold prices have already delivered strong returns to investors, with a five-year gain of over 110 per cent, and a one-year rise of nearly 25 per cent.
Expert Insights
“The safe-haven demand has spiked as investors worry about the economic impact of Trump’s tariffs. According to US Fed Chair Jerome Powell, a one per cent hike in tariffs could reduce US economic growth by 0.10 per cent,” Anuj Gupta, Head of Commodity and Currency at HDFC Securities.
- According to Anuj Gupta, Head of Commodity and Currency at HDFC Securities, gold prices are currently rallying due to trade war fears and recession concerns in the US.
- He believes that the triggers supporting gold — including geopolitical tensions and inflation — remain intact, and that any correction in gold should be seen as a buying opportunity.
Market Outlook
| Triggers Supporting Gold | Support Level | Resistance Level |
|---|---|---|
| Geopolitical Tensions | Rs 91,000 | Rs 99,000 |
| Inflation | Rs 91,000 | Rs 99,000 |
| Central Bank Gold Purchases | Rs 91,000 | Rs 99,000 |
“Persistent trade tensions, inflationary pressures, and central bank gold purchases will continue to support prices,” Navneet Damani, Group Senior Vice President at Motilal Oswal, said. He expects support for gold at Rs 91,000 and resistance at around Rs 99,000 in the near term.
“Any correction in gold should be seen as a buying opportunity,” Navneet Damani advised investors, emphasizing that gold will remain attractive as long as global policy uncertainty and trade issues persist. He also suggested maintaining a ‘buy on dips’ strategy, highlighting the importance of staying vigilant in the market.
As the gold prices continue to soar, investors are advised to keep a close eye on the market developments and to remain prepared for any market fluctuations.
Despite the recent gains in the stock market, experts say that gold still has room to run. The triggers supporting gold – including geopolitical tensions and inflation – remain intact, and the market outlook is looking constructive.
With the gold prices expected to touch Rs 1 lakh or even Rs 1.25 lakh per 10 grams, investors are advised to be cautious and to consider their long-term investment goals. As the market continues to evolve, it is essential to stay informed and to make informed investment decisions.
According to Navneet Damani, the outlook for gold is constructive, and the market is expected to remain supportive of gold prices in the near term.
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