In 2011, gold reached above $1,900, but fell sharply afterwards and consolidated at around $1,000.
Now, the market is witnessing another bull run that may turn out to be secular, at least for gold.
According to Metal Focus, a London-based bullion and metal research firm, “gold continues to have plenty of upside from current levels. We expect prices to come close to the 2011 peak of $1,921, although that level may not be breached this year.”
This may not to be a straight line rally and there will be periods of liquidations that will potentially take it to levels as low as $1,600. Investors should buy at such.
That will make such dips short lived. Overall, we forecast gold price
will average $1,700 in 2020, up 22 per cent year-on-year.” So far in 2020, gold price
has averaged at $1,647 per ounce.
There is a flip side to this though. In India and in many markets, money may flow to stocks in the hunt for bargains. A decline in overall consumer savings is also likely to undermine gold investment.
Institutional investors might continue to buy sovereign gold bonds.India and china, the two largest consumers, have seen sharp reduction in gold demand with India’s jewellery demand, as projected by Metal Focus, expected to fall 36 per cent to 348 tonnes. Simultaneously, in many emerging market the sale of old jewellery will be higher, and will also hit fresh demand.