Gold to give investors 10-15% returns in FY24, say experts

CHENNAI: Gold on Thursday hit a record high of Rs. 61,498/10 grammes and is expected to go up further to give 10-15 percent returns in FY24 for investors, said experts.

"Gold prices have rallied nearly to record highs. Domestically, it has touched Rs 61,498/10 gm, with silver at Rs 77,500/kg. Internationally too, the precious metals are trading at record highs, with gold hitting $2,080 and silver at $26, respectively," said Colin Shah, MD, Kama Jewellery.

"The rally in the prices of precious metals is largely due to the developments in the US-Fed meeting, the debt ceiling, and concerns around slowing economic growth affecting the USD and ultimately the gold and silver prices," Shah said.

The US Federal Reserve hiked the policy rate by 25 basis points on Wednesday after gold prices touched $2,080/oz.

The hiking of rates by the US Fed has put pressure on the dollar, and indications of pausing and a likely mild recession in the later part of 2023 have provided support to gold prices, Shah added.

According to Shah, the current setup has increased the appeal of safe-haven investments like gold and silver.

International gold prices are likely to hit $2,090-2,100/oz and Rs 62,500–62,750/10 gm and silver prices between Rs 77,600–77,800 and $26.50-27/oz in the short to medium term.

"On the back of weak and uncertain performance in risky assets, it is strongly advised to remain invested in gold for further 10-15 percent returns on the base case and 15-20 percent on the bull case scenario," said Jateen Trivedi, Vice President, Research Analyst, LKP Securities.

Trivedi said in FY23, gold prices jumped a massive Rs 8,000 in domestic markets from Rs 52,000 to Rs 60,000, which is 15 percent returns beating all other asset classes.

The geopolitical tension in Russia and Ukraine and its escalation proved that gold is a perfect hedge in the portfolio, giving out strong returns.

Going ahead, gold still looks lucrative in terms of return on investment from a safety perspective, where inflation still remains high globally and the interest cycle, which is yet to ease, will also provide the push needed for gold to run and give a 10-15 percent return in the coming FY24.

The prices can easily touch Rs 66,000–68,000 on base case performance before we reach the FY24 end next year, Trivedi said. (IANS)

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