Gold has been the best performing asset class in FY23 and a robust outlook on bullion remains intact for FY24, as well. As fears of global slowdown and high inflation loom, the yellow metal is expected to give returns of 10-15% in the base case scenario and 15-20% in the bull case scenario.
“On the back of weak and uncertain performance in risky assets it is strongly advised to remain invested in gold for further 10-15% returns on base case and 15-20% on bull case scenario,” Jateen Trivedi, Vice President, Research Analyst at LKP Securities. “The prices can easily touch 66,000-68,000 on base case performance before we reach the FY24 end next year,” Trivedi said.
Meanwhile, Rahul Kalantri, VP – Commodities at Mehta Equities Ltd, said that in the domestic market, gold might test levels between Rs 64,500 and Rs 66,800. As for the international price, if gold breaks and sustains above $2078, a big upside could open that may take levels up to $2,240-$2,365 levels,” he further said
Another analyst Anuj Gupta echoes similar sentiments while remaining bullish on the prospects of the yellow metal. The currency and commodity expert at IIF Securities sees MCX Gold testing levels of Rs 63,000-64,000 in FY24. The international price could reach $2,100 per troy ounce, he further added.
“Gold has been proven a perfect hedge in the portfolio giving out strong returns,” the LKP Securities expert said. He said that Gold still looked lucrative to him in terms of return on investments (RoI) and from the safety perspective. Amid high global inflation, the interest rate cycle is yet to ease and it could provide impetus to the yellow metal, he added.
Gold has outsmarted all other asset classes, returning as much as Rs 8,000 or 15% returns in FY23, according to Trivedi of LKP Securities. In the domestic markets, the price of gold has risen from Rs 52,000 to Rs 60,000 in the financial year gone by, he said.
In contrast, Nifty has given flat to negative returns in FY23, Trivedi said, adding that the geopolitical tension between Russia and Ukraine imposed very high global inflation at a time when countries were recovering from the onslaught of the Coronavirus Pandemic.