The trigger for international gold prices rising to $3,000 per ounce was Germany's upcoming heavy government borrowing.
Since the last nine years, gold investors have made money each year, while gains in silver have been consistent only in the last five years.
The new Samvat 2080 is viewed as a year of hope for industrial and precious metals. A key reason is the expectation of US interest rates peaking, followed by a reduction in the coming months. Regarding crude oil, its trajectory depends more on how the situation unfolds in West Asia.
The demand for gold is expected to take a hit if the price of the yellow metal - which has been hovering around Rs 60,000, a level never seen before - remains elevated. Due to a sharp increase in price in a very short time and the flow of smuggled gold continuing, gold price in Mumbai is quoted at around Rs 59,000 per 10 gram. Typically, overall demand in the January-March and July-September quarters is moderate-to-dull, which is the case in the ongoing period.
Gold, the safest haven amid the ongoing uncertainty, also emerged as one of the most lucrative investment options in financial year 2022-23 with an impressive return of 16.1 per cent in rupee terms, and 2.3 per cent returns in dollars. And, had it not been for the very high inflow of smuggled gold and the huge discount prevailing in the market due to high prices, the returns in gold would have been much higher, analysts said. The precious metal has consistently been delivering positive returns in India since 2016.
A sharp fall in the price of Bitcoin and other cryptocurrencies is another hard blow to the already sinking cryptocurrency market in India. Global and domestic prices have been on a downward trail since November last year when Bitcoin prices hit a peak of close to $68,000 in international markets. The recent past has seen a much sharper fall in the price of the leading cryptocurrency, Bitcoin.
Uncertainties like the bankruptcies bill, rising non-performing accounts at banks and political uncertainty are expected to drive gold demand higher in India.
A substantial fluctuation is likely because for a long period gold has moved in a narrow range of $ 50-60 and at higher levels short positions were built.
If there is turmoil in currencies, gold can shoot up sharply, says author of Arora Report.
Real reason for crashing gold prices is not Trump victory, says expert.
Experts advise investors to buy at lower levels in the next few months and sell at the higher end of their range in the second half, reports Rajesh Bhayani.
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