Amid volatility in equity markets, gold prices may touch a record level of Rs 20,000 per 10 grams in the near future with traders preferring to park their money in safe havens such as the precious metal, analysts said.
"Because of uncertainties in the Eurozone, investors are shifting their portfolios to safe havens like gold. Stock markets have been choppy in recent times as people are pulling out money and these funds are coming in gold. For the next 15 days, gold prices will be in the range of Rs 18,000-19,000 per 10 grams," SMC Global Vice President Rajesh Jain said.
"If the Eurozone sovereign crisis further worsens, there will be fresh buying in gold, which may take prices up to Rs 20,000 in the near term," he added.
Yesterday, Moody's downgraded Greece's credit rating to junk, which led to a fall in US stocks overnight on worries that the global economic recovery may slow down. However, analysts are bullish about gold and see this as a demand-boosting situation for the precious metal.
"Uncertainties in the global economy are making gold the best buy among other commodities. It is expected to breach the Rs 19,500 level soon and may touch Rs 20,000 in the next two months," Kuljeet Kataria, head of commodities at Motilal Oswal Financial Services, said.
Gold gained Rs 25 to Rs 19,025 per 10 grams in the national capital yesterday, on fresh buying by traders in tandem with the firming global trend.
The trading sentiment improved after gold advanced for the second straight session in Asia on speculations that demand for the precious metal as an investment haven would drive prices to record levels.
The price of gold in overseas markets, which normally sets the price trend on the domestic front, gained 0.5 per cent to USD 1,232.70 an ounce.
It seems that the debt crisis in the Eurozone will take some time to stabilise and, in this scenario, gold is considered as the best investment option, analysts said.
"Within a month or two, gold will touch the Rs 20,000 mark as everybody is shifting investment into gold and it will remain the buying option for quite some time now," Emkay Global Financial Services' head of commodities Atul Shah said.
Stock markets across the globe have been in correction mode ever since the European debt crisis began. Overseas investors are offloading stocks in emerging countries amid volatility in global markets.
In May alone, FIIs sold a net USD 2 billion shares in Indian equity markets. The BSE benchmark Sensex has been 0.7 per cent down so far this year.