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Business News/ News / India/  Gold prices surge 15% in FY23, may touch 66,000-68,000 levels in FY24. Should you invest?
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Gold prices surge 15% in FY23, may touch ₹66,000-68,000 levels in FY24. Should you invest?

On the back of weak and uncertain performance in risky assets, the brokerage's analyst strongly advised to remain invested in Gold for a further 10-15% returns on the base case and 15-20% on the bull case scenario.

The outlook for FY24 looks in the favour of gold. (Hemant Mishra/ Mint)Premium
The outlook for FY24 looks in the favour of gold. (Hemant Mishra/ Mint)

Gold prices recorded double-digit growth in fiscal year FY23, proving to become one of the best alternatives to give strong returns amidst extreme volatility in the equities. Where Nifty and Sensex have broadly given flat to negative returns in FY23, gold has risen by a whopping 15% owing to macroeconomic risks. The financial year FY24 looks lucrative for the bullion and it has the potential to further rise between 15% to 20% in a bull case scenario. So what is the next level of gold in FY24?

Last week, on March 31, MCX gold futures maturing for June 5, ended the fiscal FY23 with a slight downside of 295 or 0.49% to 59,600 per 10 grams. But the futures had risen to as much as 60,065.

MCX gold futures tracked international spot gold which saw a downside o 0.6% to near $1,968 per ounce on Friday. But as bets escalated for a slowdown in the pace of interest rate hikes from the US Federal Reserve, investors are likely to be drawn towards metal, while being cautious in the dollar.

According to Jateen Trivedi, VP Research analyst at LKP Securities, gold prices in last FY23 have jumped a massive 8000 rupees in Domestic markets from 52000 to 60000 which is 15% returns beating all other asset classes. Nifty has given flat to negative returns in this FY23, as the geopolitical tension in Russia & Ukraine escalation brought the inflation much higher globally where in the economy was already trying to digest the liquidity infusion done by the US in the pandemic which gave inflation the push in Quantitative easing phase.

He said, "Gold has been proven a perfect hedge in the Portfolio giving out strong returns."

The outlook for FY24 looks in the favour of gold.

Trivedi said, "going ahead Gold still looks lucrative in terms of ROI from a safety perspective where the Inflation still remains high globally and interest cycle which is yet to ease, will also provide the push needed for Gold to run and give 10-15% return in coming FY24."

LKP Securities analyst believes gold prices can easily touch 66000-68000 on base case performance even before we reach the FY24 end next year.

On the back of weak and uncertain performance in risky assets, the brokerage's analyst strongly advised to remain invested in Gold for a further 10-15% returns on the base case and 15-20% on the bull case scenario.

Similarly, Rahul Joseph, Founder, and Director said “Gold prices in India have been on the rise for the past few years and can be attributed to various factors including the global economy, currency fluctuations, and changes in demand as well as supply of gold.

Additionally, Joseph added, "demand for gold in India has remained strong due to its cultural and religious significance, particularly during festivals and weddings. It has more or less been a traditional investment option in India. For most people, it's a safe haven asset that can provide a hedge against inflation and currency devaluation. Despite some fluctuations, the trend of rising gold prices in India is expected to continue in the near future."

 

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.

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Published: 02 Apr 2023, 01:56 PM IST
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