North India Statesman
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There has been a huge rise in the prices of gold and silver in the last few months. Both precious metals have reached their all-time highs. From investors to the common man, everyone is hopeful that gold and silver will reach new highs by Diwali. However, experts are now cautioning investors. He believes that gold prices may fall. Soon the price of gold will fall from ₹1,22,000 to ₹77,700. Know why experts are saying this…
Gold prices may fall…
Amit Goyal, co-founder and chief global strategist, PACE 360, says the current bullish trend is not sustainable. His company manages assets of more than $2.4 billion. According to Goyal, the current prices of gold and silver are well above their intrinsic value, and there is a possibility of a major decline or fall in the market. Over the last 40 years, only twice has gold and silver performed this well when the dollar index was weak. Both times, this was followed by a major decline.
gold price
At present, the price of gold in the international market is around $4,000 per ounce and the price of silver is around $50 per ounce. In India, 24 carat gold was trading at Rs 1,22,540 per 10 grams and silver at Rs 1,57,900 per kg in Delhi on October 8.
Is the gold rush on its last legs?
According to Goyal, the current bullish levels are now near the psychological boundary, which usually signals the end of a major rally.
Goyal estimates that gold prices may fall by 30-35%. He cited the example of 2007-08 and 2011, when gold prices fell by 45% after a huge rally. If this happens again, gold prices in India may fall from ₹1,22,000 to ₹77,700 per 10 grams. The fall in silver may be even deeper. Goyal says that silver is showing maximum growth at this time. Therefore a decline of at least 50% is possible. That means prices can fall to ₹77,450 per kg.
When will investment opportunities come again?
According to Goyal, if gold falls to $2,600-2,700 an ounce, it will become viable again. He says that at that level, gold will once again prove to be the safest and most attractive investment in the world. However, they are not very bullish on silver. He says that due to global economic recession, industrial demand for silver may reduce.
Recession will reduce the demand for silver…
Goyal estimates that the next 2-3 years may see a deep recession led by America. This will also impact the demand for industries like photovoltaics, semiconductors and electric vehicles. He said that even though these sectors use silver, the recession could lead to a decline in demand for the first time.
Advice for investors…
Amit Goyal’s warning is clear that if you are thinking of investing in gold or silver now, then wait for a while. Both these metals will prove to be a real bargain only after the coming price decline. This means that the current bull market may prove to be a bubble to some extent. These prices may fall soon.
