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 USD.
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. "The year began (with gold) at Rs 39,100 (per 10 grams) and USD 1,517 (an ounce). The knee jerk reaction to the pandemic was short-lived as the domestic price hit a low of Rs 38,400 from where it steadily rose all the way to Rs 56,191. The stimulus provided subsequently triggered a sharp rise in investment buying in the domestic market," Commtrendz Risk Management Services CEO Gnanasekar Thiagarajan informed.
He said the outlook for gold remains strong despite coronavirus vaccine prospects and economic revival post COVID19, mainly due to fresh stimulus expectations. "The dollar could weaken on the back of more stimulus and that could help gold prices rise once again,” he said.