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How far the gold price will go.
In the past few days gold price have shown the glitters of it in real terms setting new levels of high in price. Gold prices zoomed to a record high at Rs 15,200 per 10 gram in the Indian bullion market in the past few days.
With the International Monetary Fund (IMF), the third largest official holder of gold, all set to sell around 400 tonnes of gold to fund changes to its financing base, the bullion market is set to witness a flurry of activities in the coming months.
A recent surge in IMF lending to countries facing balance of payments crises related to the global economic slowdown and financial turmoil will make them to sell gold. The sale is expected to hit the gold price, which is at the peak now. Following the recession, gold prices have soared to new heights as safe haven buying increased. The existing Central Bank Gold Agreement, which limits gold sales by central banks to ensure the market is not flooded with bullion, is in its final year and is due to expire in September. So we can expect an healthy movement and strong base full rally in gold. So those investors who are planning to do investments can invest in gold as this will give huge returns in the coming months. Gold and the rest of the precious metals have become the only real safe investment.
Foreign exchange reserves of India and China slumped in January-February and both the countries may go for more accumulation of gold which may have an impact on the global bullion markets. Even as recession is wreaking havoc across economies, more and more countries, especially Asian economies, are moving to gold as reserves. With the growth of the domestic industry and higher oil prices in international markets, the current account deficit is expected to widen in the coming years.
Citigroup has today increased its Gold Price forecasts for 2009 and 2010 as safe-haven demand for the yellow metal continues to grow,
So in the coming months we will find gold prices to touch and built new records. So the investors who does investment in gold can park their funds here to encash the opportunities which will come in the next few months. Buy gold at a bit lower level and sell them later on as per expected profit calculated or expected by the investors .So those investors who are planning to do investments can invest in gold as this will give huge returns in the coming months. But by them when the season of marriage is over since prices will come down during that time.

Published by

Indraneel Sen Gupta
(Vice President-Business Development,Research & Product IFAN Finserv Private Ltd.(SPA Group Company) )
Category Others   Report

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