Gold prices to witness big moves, may hit Rs 1.10 lakh/10g in one year. Is now the time to buy?
According to a report by Angel One, gold prices should accumulate near the Rs 85,000 level when meaningful dips occur.
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'Investors with a long-term perspective... should accumulate on every dip, taking advantage of value average for higher returns,' the report said.
Further, from a portfolio strategy standpoint, Angel One recommends maintaining a gold allocation of at least 10%. Analysts at Angel One noted, 'Our advice to investors is to allocate at least 10% of their portfolio allocation towards gold for better diversification.'
Echoing a similar sentiment, Joni Teves, Precious Metals Strategist at UBS Investment Bank, also stated that she is bullish on gold and believes that diversification is likely to continue to drive prices higher.
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'We remain bullish on gold and think diversification should continue to drive prices higher. We don't think positioning is crowded and there is plenty of room for investors to continue building gold allocations,' Teves said.
Lingering worries over US fiscal deficits, globally surging bonds, Dollar weakness and intensifying trade war make a strong case for gold extending its rally further, though it is to be noted that markets are still somewhat sceptical of Trump's threat to the EU.
The US Dollar Index has weakened 7% this year and is likely to fall further on US exceptionalism being put into question. USDINR volatility will significantly affect domestic gold prices.
'Gold bulls need to be cautious about the possibility of Trump shifting his stance on EU tariffs and progress in trade deals with other trading partners,' noted Praveen Singh of Mirae Asset Sharekhan.
'A decisive breach of the resistance zone of $3365-$3371 may take the yellow metal to $3435 and will bring the all-time high of $3500 in focus,' Singh added while highlighting that he maintains a bullish stance on gold.
After delivering strong gains over the past year and a half, the yellow metal continues to shine as a preferred asset for investors seeking long-term value and portfolio stability.
Gold has historically proven to be a reliable wealth creator, especially in times of economic uncertainty, and recommends a strategy of value averaging for accumulation.
Amid global macroeconomic shifts, central bank buying, and steady demand from jewellery and investment sectors, Angel One advises investors to allocate at least 10% of their portfolio to gold for better diversification.
Angel One, in its report, has also highlighted that gold has already delivered strong returns over the past one and a half years and continues to offer a compelling investment case for long-term investors.
If one looks at the table below, it clearly states that investment in gold pays good returns. Hence, one should make investments in gold from a long-term perspective.
ETMarkets.com
On the demand front, the report outlines that jewellery has consistently contributed over 50% of total gold demand for more than a decade. Additionally, central banks have emerged as a key source of demand post-COVID, with their interest in gold rising steadily over the past four years.
'This trend will likely continue in 2025, boosting the yellow metal prices for the second half of 2025,' analysts at Angel One said.
ETMarkets.com
It also emphasised the role of gold as a stable asset in uncertain times. 'Gold as an asset has been a good diversifier in any portfolio for decades,' the report said, adding that both geopolitical tensions and macroeconomic factors have influenced gold demand.
On the supply side, it was mentioned that global gold supply has been steady at over 4,000 tons annually for the past decade, reinforcing the metal's fundamental strength.
ETMarkets.com
Also read:
Bulls & bears played tug of war in June over last 10 years. Should you stay put or take a vacation?
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: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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