In Monday's session after analyst softened their expectations of a Fed rate cut of a maximum 25 bps in the upcoming Fed meet and high-order equities volatility, gold gained strength to hit the highest record price of Rs. 35,970 per 10 gram.
Gold price upswing to continue with a surprise
For those looking to take a dig into the yellow metal, the move shall be to wait for the dip to come, which can be at any time. As more of the upward trend in gold price is likely anticipated given the geo-political situation and other factors weigh.
In its report, World Gold Council "The prospect of lower interest rates should support gold investment demand. Our research indicates that the gold price was higher in the 12 months following the end of a tightening cycle. Moreover, historical gold returns are more than twice their long-term average during periods of negative real rates - like the one we are likely to see later this year. At the same time, the US dollar - usually a headwind for gold - may remain range-bound as trade tensions and lower rates offset continued economic growth."
Dovish monetary policy stance not just in the US but across the world is favouring gold as a safe-haven investment as it is in these times of low-interest rate that non-interest yielding investments such as gold gain momentum.
Gold price: Likely return from the yellow-metal
With the recent customs hike on the yellow-metal to 12.5% to shore up the government revenues, the price of gold shall shoot up by 2.5%. Also, the current domestic and global factors which are being a spoilsport for gold buyers can surprise the bullions market with its price trend. And so while the already invested investor community will cheer the rise in the gold price, the demand scenario in the metal will be affected in the upcoming festival season which otherwise brought resilience in its demand.