Gold price is hovering around Rs 45,000 per 10 gm mark. Should you buy Gold now? In a chat with Zee Business Managing Editor Anil Singhvi, Market Expert Ajay Bagga reveals his gold price outlook and tells whether it is the right time to buy. 

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Bagga said that the investors should buy Gold now and it should be accumulated gradually. He said that the Gold prices have come down by almost 20 per cent from the highs of USD 2070 in August. There was some recovery in Gold prices during this week.

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This is because of three reasons. One is that the demand for Gold went down by 11 per cent last year as the end consumers in India and China did not buy gold. While China is the leading jewellery market in the world, India is at number 2, Bagga said. 

The second reason is that Central Banks also stopped buying Gold in August last year. Russia and China were buying a lot of gold over the last 3-4 years. 

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The third thing is that whenever bond yields rise globally, Gold prices first fall and then increases rapidly when the inflation comes, he further said. 

The expectation of reversals were expected in February, but there has been some delay because of two stimulus packages – one of US and the other of Europe. That has pulled up the stock markets, Bagga said. 

Moreover, the US Dollar has also gained strength which has dampened the chances of Gold, Bagga opined.  

On Gold Outlook 

Bagga said that the demand in India and China are expected to go up this year and this will be positive for the revival of Gold prices. He said that Gold is nearing its bottom and may rise from here. It may take some time though, he said. 

He also said that some of the money is going to Bitcoins and this cryptocurrency has performed very well. When the money which is now going into bitcoins stop, investment in gold will increase.