Gold prices may hit Rs 1 lakh soon

The yellow metal will remain attractive as long as global policy uncertainty and trade issues persist, say experts

New Delhi: Gold prices in India could soon touch Rs 1 lakh per 10 grams, as global uncertainties continue to push investors towards safe-haven assets, experts said on Saturday.

The sharp rise in gold prices is being driven by fears of a slowdown in the US economy, fuelled by President Donald Trump’s renewed tariff policies.

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According to estimates by global brokerage Goldman Sachs, gold prices could reach $3,700 per ounce in the near term, and possibly touch $4,500 per ounce if trade tensions escalate further.

If this happens, domestic gold prices on the Multi Commodity Exchange (MCX) could climb to Rs 1 lakh or even Rs 1.25 lakh per 10 grams, market experts said.

Gold has already delivered strong returns to investors. In the last five years, gold prices have jumped more than 110 per cent, from Rs 44,906 per 10 grams on April 17, 2020, to Rs 95,239 per 10 grams on April 17.

In the year-to-date (YTD) period alone, prices have risen by nearly 25 per cent.

Anuj Gupta, Head of Commodity and Currency at HDFC Securities, said gold prices are currently rallying due to trade war fears and recession concerns in the US.

“The safe-haven demand has spiked as investors worry about the economic impact of Trump’s tariffs. According to US Fed Chair Jerome Powell, a one per cent hike in tariffs could reduce US economic growth by 0.10 per cent,” Gupta said.

Despite the recent gains in the stock market, experts say gold still has room to run. Gupta said the triggers supporting gold — including geopolitical tensions and inflation —remain intact.

“Any correction in gold should be seen as a buying opportunity,” he added.

Navneet Damani, Group Senior Vice President at Motilal Oswal, said the outlook for gold is constructive.
“Persistent trade tensions, inflationary pressures, and central bank gold purchases will continue to support prices,” he said.

Damani expects support for gold at Rs 91,000 and resistance at around Rs 99,000 in the near term. He also advised investors to maintain a “buy on dips” strategy, saying that gold will remain attractive as long as global policy uncertainty and trade issues persist.