In Brief
The bullish season for gold and silver is about to return
Gold could offer a 20% return by next year
Why are the prices rising?
The season of gold and silver boom is about to return soon. There has been a surge in the prices of gold and silver in the global market. Both metals are at their highest in the last three weeks. According to a report, the price of gold could reach $5,000 per ounce by the year 2026. This means that the price of 10 grams of gold could reach up to 159,000 rupees in 2026. This implies that gold could offer a 20% return from today until the coming years. The crisis of government shutdown in the US has been averted. Meanwhile, the US Federal Reserve (US Fed) may soon announce a cut in interest rates. As a result, investors will turn back to gold and prices will rise.
In the global market, Comex gold futures (December delivery) rose by 0.45% to reach $4,140.75 per ounce. Silver futures also increased by 0.08% to reach $50.35 per ounce. In Mumbai, 24-carat gold reached 1,23,830 rupees per 10 grams and 22-carat gold reached 1,13,510 rupees per 10 grams, while silver reached 1,57,100 rupees per kilogram.
Why are the prices rising?
Kanat Chainwala, Assistant Vice President of Commodity Research at Kotak Securities, expressed his opinion on the movement of gold. According to him, spot gold increased by 3% on Monday. It reached a two-week high of $4,116.7 per ounce. The impact of the end of the shutdown crisis in the United States was observed. Meanwhile, there are indications of an economic slowdown. Therefore, there is a possibility that the American Federal Reserve may decide to cut interest rates.
The American Fed is expected to cut interest rates by 64% in December and up to 77% in January. Central and central banks have increased their inclination towards gold purchases. Investors have also increased their investments. China's central bank (PBOC) increased its gold reserves for the 12th consecutive month. This gold purchase has reached 74.09 million ounces. Global central banks purchased 220 tons of gold in the third quarter (Q3), which is 28% more than the second quarter. Increased demand was recorded in Gold ETFs (Exchange Traded Funds) for the fifth consecutive month. In October, the highest purchase of 54.9 tons of gold was recorded.
In the coming days, there will not be a significant fluctuation in prices. Gold will remain stable. However, it is predicted that gold may surge later. According to JP Morgan, gold could reach the range of 5000 dollars per ounce by 2026. Meanwhile, Bloomberg suggests that by the end of 2026, that is by December next year, gold prices could reach between $5,200 to $5,300 per ounce. This means the price of gold will exceed one and a half lakh. Customers could receive more than a 20% return on their current investments in the future.