In September this year, owing to a host of factors including monetary easing measures by major central banks world over to tackle slowdown fears amid US-China trade woes has led the yellow metal to hit a 6-year high of $1566 per ounce in the international markets. And Citigroup Inc. anticipates gold to hit a new high of $2000 per ounce in 2 years time buoyed by positive factors that could trigger a rally in its price.
The highest price logged by the precious yellow metal was $1921.17 per ounce in 2011. And the new levels estimated at $2000 per ounce means a price of more than Rs. 50000 per 10 grams in the domestic markets. 1 ounce is equivalent to 28.3495 grams and this would cost Rs. 1.43 lakhs if the current exchange rate of 71.50 is taken into account. So, 10 gm would cost approximately Rs. 50,442.
On September 12, the European Central Bank (ECB) has cut rates and investors now await the outcome of US Fed meet slated for next week wherein rate cut is expected too. Historical trend shows that gold price remain supported when the US Federal Reserve resort to monetary easing programme. An analyst at Citi said Fed would eventually cut rates to zero.
Spot gold in the international markets trades close to $1500, after surging 16% this year. Citi said that it had advanced the baseline forecasts for the precious metal by $125 to $1,575 per ounce on the Comex for the fourth quarter and for 2020 to $1,675, a rise of almost 14%.
"For now, the US consumer and potential growth story is holding up. However, we remain more concerned about market signals - three months to 10-year yield curve inversion - and leading indicators that are weakening at the fastest pace since the Great Recession", said the global bank.