Gold expected to give 15-18% returns in Samvat 2081, say analysts

Gold is expected to deliver a stellar 15-18 per cent return in Samvat 2081, driven by positive economic factors and safe-haven demand, analysts said.

Samvat 2081 marks an important period for Indian investors as it signals the start of a new financial year in the Hindu calendar, coinciding with the auspicious festival of Diwali.

Gold and silver have delivered a robust performance in Samvat 2080, and the outlook remains positive for Samvat 2081, though investors may see moderate gains amid possible shifts in global market factors, they added.

"The outlook for gold in Samvat 2081 remains positive. We expect a base performance of 10 per cent with potential for 15-18 per cent gains if the import duty cut continues to drive buying momentum.

 

"However, any hike in import duties could push gold's performance beyond 15 per cent. A stable interest rate environment could also support a gradual upward trend," Jateen Trivedi, Vice President of Research for Commodities and Currency at LKP Securities, told PTI.

Gold has outperformed many asset classes in Samvat 2080, delivering over 30 per cent returns compared to 25 per cent from Nifty. This strong performance was fuelled by geopolitical tensions and escalating conflicts worldwide, along with the interest rate cycle turning in major economies, making gold a reliable safe-haven investment, Trivedi said, explaining that the precious metal's status as a secure investment strengthened amid a volatile economic landscape.

Geopolitical conflicts, shifts in monetary policy of global economies, and industrial demand have boosted the yellow metal to touch record highs of Rs 82,400 per 10 gram in the national capital on Thursday.

With this, the precious metal price has recorded a 35 per cent surge since October 29 last year when it was at Rs 61,200 per 10 grams.

Echoing similar sentiments, Pranav Mer, Vice President of Commodity and Currency Research at JM Financial Services, emphasised on gold's strong domestic run last year, supported by sustained central bank purchases and shifts in global interest rate policies, leading to increased buying from exchange-traded fund (ETF) investors.

In overseas markets, the precious metal saw gains of up to 40 per cent driven by central banks' appetite for the precious metal amid geopolitical risks and prospects of future interest rate cuts.

On the other hand, silver has played the catch up game with gold in Samvat 2080, yielding around 40 per cent gains due to its dual appeal as a precious and industrial metal, noted Jateen Trivedi.

The performance was bolstered by monetary dynamics similar to gold and also by strong demand for base metals and Chinese economic stimulus measures.

"The outlook for the metal remains positive with expectation of loose monetary policies globally, revival in the Chinese economy, and rising demand from solar industries, electronics, etc," Mer said.

He added that silver's demand as an industrial metal will continue to grow as economies expand their renewable energy commitments.

In Samvat 2081, analysts said investors will be closely watching global monetary policies and demand trends within key sectors to gauge the precious metals' trajectory. Both metals are expected to remain attractive amid economic uncertainties.

"Gold and silver prices are expected to continue their upward trend, but investors may experience steadier gains this year as opposed to the high momentum seen in Samvat 2080," Mer said, summarising the outlook for the year ahead.

In July this year, gold and silver prices corrected sharply by 7 per cent in the local markets after the government slashed the basic customs duty on gold and other metals. However, the bullion prices rebounded as demand from Indian consumers went up.