Buy gold! Price set to hit Rs 42,000 per 10 gms by 2020, experts say

Gold price prediction 2020: Rates in Lucknow, Agra and other parts of India have been witnessing a huge rally over the last few months. In fact, gold price in India has scaled a nearly 6-year high and have crossed Rs 40,000 per 10 gms in Indian spot markets. Globally, gold prices are expected to further soar as the US Fed has maintained a dovish stance on interest rate cuts, US bond yield in the last decade has been negative and geopolitical tension in the Middle East and US-China trade war is further complicating the global trade set-up. As such, investors have started to look at gold as a haven for investment. 

According to experts, gold may rise to $1,600 per ounce in one year! However, they also sounded a warning - gold price will correct itself and finally come to rest at $1,400 per ounce once the current triggers are gone. In Indian perspective, gold price is expected to scale the mark of Rs 42,000 per 10 gms in one year and the commodity experts have recommended investors to buy on dips every time when there is some correction or profit booking in the gold price.

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Suggesting Indian gold investors to buy on every dip, Anuj Gupta, Deputy Vice President — Commodity and Currency trade at Angel Broking said, "By Diwali 2019 the gold price globally is expected to touch $1,560 per ounce to $1,580." 

In MCX gold price terms, Gupta predicted Rs 39,500 per 10 gms to Rs 40,000 per 10 gms by Diwali 2019. However, on gold price prediction in one-year perspective, Gupta said that gold price in one-year perspective is expected to touch Rs 42,000 per 10 gms. However, by the end of December, 2019, he expected the yellow metal to touch around Rs 41,000.

On the domestic front, the gold price experts advised keeping an eye on spot gold price in Lucknow, gold price on Agra and day to day rates in Nepal and India. He said that in Indian domestic markets like Lucknow, Delhi, Mumbai and other markets, the spot gold prices have already touched the Rs 40,000 per 10 gm few weeks before and the current correction in these Indian domestic market is mainly caused by profit booking. 

An investor can buy gold at current levels as well.

Giving global outlook for gold price Hitesh Jain, Senior Analyst - Institutional Equities at Yes Securities said, "With Gold prices jumping to a six-year high in dollar terms, we sense that markets have factored in most of the variables, namely ongoing trade issues, deceleration in global manufacturing activity and sheer size of negative-yielding sovereign bonds. However, we infer that most of the gains are done in the yellow metal, with prices trading above our earlier target of $1,450 per ounce for this year. We need to acknowledge the fact that although there is an evident slowdown in global economic activity, an outright risk of recession has not yet materialized."

Jain said that IMF sees the global GDP expanding 3.2 per cent in 2019 and then growth rebounding to 3.5 per cent next year. An inverted yield curve in the US foretells an impending slowdown in the US, but the fact remains that private consumption remains resilient in the world’s largest economy. "We perceive that financial markets are exaggerating the risk of recession, with the value of negative-yielding bonds soaring to $17 trillion, quite a humongous number in a $57 trillion global bond market. Literally, 50 per cent of the sovereign bonds is now fetching sub-zero yields. Interestingly, the entire German yield curve is underwater. The astonishing fact remains that German bond yields are much negative than Japanese despite relatively higher inflation in Germany. This seems to be nothing short of mispricing in the bond markets. Most importantly, governments in Europe and Asia are gearing for unleashing fiscal stimulus, which can counter the deceleration seen in manufacturing and trade. A likely fiscal stimulus across the globe can provide the much-needed impetus to the global economic engine, which can lead to and unwinding of the long-only bonds and gold trade. On the price front, we see Gold prices topping out around $1,600 per ounce and then retreat to eventually consolidate in the range of $1,400-1,450 per ounce," concluded Jain.