Bullion's bull-run: Gold to hit Rs 52k by Diwali

New Delhi: With looming uncertainty and no likelihood of an early economic recovery in sight, the bull run in gold prices is here to stay. Analysts expect domestic futures to touch Rs 52,000 per 10 grams in the next few months, till Diwali.

Experts also predict that with the current trend, gold may reach historic levels around Rs 65,000 per 10 grams in two years time. Futures of the yellow metal have touched new highs in India off late.

On Wednesday, the August contract of gold futures on the Multi-Commodity Exchange (MCX) touched an all-time high of Rs 48,589 per 10 grams.

It has, however corrected since and is currently trading at Rs 48,057 on the MCX, higher by Rs 116 or 0.24 per cent from its previous close.

Market experts are of the view that both domestic and international gold prices are yet not done breaching records and will touch new highs in days to come.

The resurgence in the number of new cases of coronavirus infection across the globe has added to the uncertainty and fears.

Anuj Gupta, DVP for Commodities and Currencies Research at Angel Broking, noted: "In short term we are expecting it to reach Rs 48,800-49,000 and for long term, we are expecting Rs 51,000-Rs 52,000 till Diwali."

On the prices in the international market, he said that it may reach around $1,790 per ounce in the near term from the current levels of $1,762 and the long term, it is likely to be around $1,820-1,850 per ounce.

Gupta noted that with International Monetary Fund's (IMF) latest downward revision of economic outlook, both global and of India, and the rising number of cases and high demand by gold exchange traded funds (ETF) have led to this record breaking rise in gold prices.

Covid-19 battered India's economy is projected to contract by 4.5 per cent this fiscal, according to the IMF and the global output is projected to decline by 4.9 per cent in 2020, 1.9 percentage points below the IMF's April forecast.

Hareesh V, Head of Commodity Research at Geojit Financial Services, said that gold's safe haven appeal will remain on the higher side as there is little hope of a quick global economic recovery amid rising virus cases across the world.