Commodity Talk: Gold's 13% H1CY2024 returns robust, but positives priced-in now, says Anuj Gupta
Most bullish factors are priced in bullion now and we believe that after registering strong gains in the last three months, bullion prices are likely to witness a correction in the short term, Anuj Gupta, Head Commodity & Currency at HDFC Securities said. In the long term, he remains bullish expecting this precious metal to test Rs 78,000-Rs 80,000 levels by the end of the year.
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Gold has given 13% returns in H1CY2024 amid ups and downs. How will you rate its performance during this period against your expectations?
Gold's rally has been more than what Nifty has delivered till date. The gains have been on account of bullish buying by major Central Banks across the world. Moreover, geopolitical tension and fear of slow down in Europe and the US also played their part. All these factors have been positive for gold being a safe haven for investors. On the flip sided equities and Nifty have suffered as a consequence of this.
How has gold performed historically in H1 and in which year it delivered its best performance?
Average returns by gold over the past five years are at 8.43%. Its best six-month performance has been in 2020, the year of Covid lockdowns. That year gold yielded nearly 25% returns. The next highest are in 2024 at 13.26%. In H1 of 2022 and 2023, the returns were 5% and 6%. It has given negative returns of 6.60% in 2021.
Gold's biggest challenge it seems now is the US economy which would have an impact on Fed action and dollar index (DXY). Over the last one month, DXY has gained 1.3%
