The moment for gold

July 7, 2016 at 12:12


Gold continues its dream run in 2016 getting boost from global uncertainties post-Brexit. The yellow metal surged to its highest point since March 2014 to touch $1,371.40 an ounce in global markets, thereby registering gains of nearly 30 per cent from the $1060 levels it traded in early January, 2016.

Where is gold headed from here? Is it a good time to enter or to add to your hold holding at this price point? Commodity experts believe that gold has enough legs to take it higher and could be a good bet even after the run it has had during the year.

In fact, those tracking the metal closely have upped their target and feel that it test $1,500 and ounce levels soon.

“It’s worth remaining invested in gold. We may see the yellow metal testing levels of $1,450-$1,500 going forward,” says Kunal Shah, head of commodity research, Nirmal Bang Commodities.

Gnanasekar Thiagarajan, Director, Commtrendz Research has similar target for gold. “Concerns in global markets persist post-Brexit. Investors have moved to gold and pushed it up. The precious metal can cross $1,475 and reach $1,500 levels soon,” Thiagarajan told FeMoney.

This is higher than the level Thiagarajan had predicted for Gold soon after United Kingdom voted to pull out of the European Union plunging world markets into uncertainty. “Global markets will continue to remain affected in the next couple of weeks after the actual impact of Brexit comes to sink in. I see gold at $1,425 an ounce in the coming days,” Thiagarajan had told FeMoney days after Brexit.

Anil Rego, Founder and CEO, Rights Horizons is also optimistic on gold and prescribes a portion of one’s portfolio to be invested in the yellow metal. “Gold is an investment for the long-term. It is the rescuer in the times of uncertainty and is considered as a safe hedge during economic and political uncertainties. One should ideally hold between 5-8 per cent of the portfolio in gold,” Rego said.

Nirmal Bang’s Kunal Shah says multiple factors are pushing up gold. “The prevalence of negative real rates regime in many countries, ongoing crisis in currency market and falling yields in developed economies makes gold very attractive as there are no easy answers to the problems which persists in financial market. Investment demand and demand from central banks will remain strong in years to come so irrespective of prices target,” Shah said