Recovery in gold prices could extend further.

Gold price is rising in both domestic and international markets. According to commodity experts, gold could rise further from current levels. They say that depreciating rupee, small saving schemes yield going below the rising inflation rate and rising COVID-19 fear may once again help precious bullion boost its safe-haven appeal. They see the possibility that in next two to three months, gold price at Multi Commodity Exchange (MCX) may hit ₹49,000 per 10 gm while in the international markets, the precious metal may go up to $1,800 to 1,820 per ounce levels.

Gold on Friday closed at ₹46610 on MCX, rebounding from year-low levels of ₹44,100, hit earlier this month.

Speaking on the gold price outlook in next two months; Anuj Gupta, Vice President — Commodities & Currency trade at IIFL Securities said, “Gold price is oscillating around $1,740-45 per ounce range but overall outlook for gold price is bullish. In international market, we can expect gold price to go up to $1,800 to $1,820 per ounce while at MCX the yellow metal price may go up to ₹48,000 per 10 gm.” Gupta said that depreciating Indian National Rupee (INR) against the US Dollar (USD), lowering US bond yield and rise in US unemployment data is supporting gold price rally. Apart from this, rising COVID-19 cases are once again putting fear among the investors and they are looking at gold as a better investment option.

Small Saving Schemes vs Inflation

Expecting gold to re-emerge as an investor’s haven; Amit Sajeja, Vice President — Research at Motilal Oswal said, “Small Saving Schemes’ yield have gone below the inflation as average inflation rate has gone above 6 per cent while the small saving schemes are yielding around 5 to 5.5 per cent. In that case, small saving schemes’ investors are looking towards gold as a better option and that is getting visible in the rising consumption of gold in India.” Sajeja went on to add that in the last five months, gold imports have gone up drastically and the upcoming marriage season is going to further fuel gold demand in India. So, gold price is expected to remain bullish in the next one quarter, even when the international triggers get controlled.

Sajeja said that lowering of import duty on gold has also helped gold price rally and predicted that in the next one week to 10 days, gold price may go up to ₹47,500 per 10 gm at MCX. He said that in the next three months, gold price may go up to ₹49,000 per 10 gm at MCX. Hence, one should maintain ‘buy on dips’ strategy and keep accumulating gold on every 4-5 per cent dip from its existing levels.

Even, the income tax officer conducting a search may not seize even higher quantity of gold jewellery based on factors, including family customs and traditions. It is solely at the discretion of the officer.