Smuggled gold was also selling sharply lower as the spot market price was not giving the physical market any room for discount. Some traders and consumers were also selling large quantities of gold added to the supplies in the market at a time when demand had dried up. However, in India,
might still rise further, in spite of low demand.
Gnanasekar Thiagarajan, director, Commtrendz Research, said: “The safe-haven demand, combined with a looming recession on the back of failed trade talks, is seeing a lot of money moving into bullion — gold and silver. More tit-for-tat tariffs could push the world economy into a sustainable recession.” He sees prices moving from $1,490 at present to $1,520-25 per ounce by August-end in the near term. This according to him means that a price of Rs 38,500/39,000 could be expected on MCX futures.
In the current financial year, gold has so far emerged as the best return-giving asset class with an FY20 return of 16.5 per cent, outshining all other major asset classes. There is no sign of other markets
like equities giving returns that are better than gold in the near future. Once investors are convinced that they will have to live with high gold prices, demand will also come and investors will still have something more to earn from gold.
“With growing concerns over further escalation in the US-China trade war, the next level for gold can be $1,520. In MCX, gold futures price could touch Rs 38,800-39,000 by October. If the rupee weakens to 72 a dollar, even Rs 40,000 per 10 gram won’t be a surprise,” said Jay Prakash Gupta, director, Moneylicious.