Gold: Correction in store, but shine likely to continue
The world as of today is passing through some turbulent times – and it is this very turbulence that is boosting the prices of gold that have surged to record highs recently.
Experts feel that these prices may sustain and even if prices of the yellow metal correct from current levels they may soon bounce back.
“Traditionally, when the US Fed cuts rates, gold prices tend to move up," says Chintan Haria, Principal- investment Strategy, ICICI Prudential AMC about the surge in gold prices.
Gold prices have resumed uptrend and COMEX spot gold prices are nearing the all -time high levels made in December 2023. Gold prices at MCX are at an all time high crossing Rs. 65000 per 10 gram on strong domestic demand and supportive international cues according to data shared by Tata Asset Management. (The data is co-relevant to February 7, 2024.)
Also, the growing inclination of global central banks towards yellow metal over US Treasuries as a means of hedging portfolio risk could lend support to the yellow metal.
“Gold prices are currently getting support from two key factors: Macro economic environment, Geopolitical risk, apart from central banks buying (gold)," says Tapan Patel, Fund manager – commodities, Tata Asset Management.
Also Read: Muthoot Finance, Manappuram valuations turn attractive; rising gold prices add to tailwinds, says ICICI Securities
Gold prices have rallied since last one year on market and political stability risk due to heightened geopolitical factors despite higher interest rates. The geopolitical factors like major war may only have a longer impact on gold prices.
Analysts believe that the impact of current geopolitical risk premium will be short lived and prices may start to react to macro-economic
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