Though gold prices are hovering around all-time highs, analysts feel that it’s still a good time to buy the yellow metal as it can only go up in the days to come.
“Going forward the gold prices are only going to go up from here on and could also cross Rs 25,000 per 10 grams as the festive season is approaching. This is a good time to buy gold as the appreciation would be attractive in the yellow metal,” said Hitesh Jain, Commodity consultant, IIFL.
Gold prices eased by Rs 115 on Thursday, after touching an all-time high of Rs 24,245 for 10 grams on Wednesday. The most active gold future for October delivery at MCX was trading at Rs 24,130 on Thursday.
Analysts say by December, price of gold could appreciate and that for investors who have not entered the market yet should buy gold when there are minor corrections. “There would be minor corrections in between till December, like on Thursday. This is the time when investors should enter,” added Jain.
Gold prices are going to appreciate as international investors are hedging the uncertainty surrounding the European Union and debt crisis in the US, by investing in gold. In India, the actual demand for gold is going to go up as the festival season is round the corner.
“July is a month of shraddh where Hindus do not buy gold, this period gets over in August and there would be stronger demand for gold now,” said Veer Sardesai, commodity expert at Sardesai Finance.
Analysts say that gold is expected to give a return of around 18-20%, while silver could give a return of around 20-22% during the year. However, analysts say that investors should only invest around 30% of their total investment amount in gold and silver. Of this, about 70% should be invested in gold and remaining in silver, said Sardesai.