Even as most commodity prices are rising, the gold and silver prices have seen negative returns in this year until now. But this week seems to be turning out quite well for the bullion because a surge in commodity prices, inflation concerns, energy constraints have weakened the global economic outlook. Also, the IMF revised its global demand outlook for this year and the next year slightly on the weaker side, which in turn has led to good buying in the case of gold and silver.
In an interview with Manisha Gupta, Surendra Mehta, National Secretary of India Bullion and Jewellers Association Ltd (IBJA),
said they are witnessing unprecedented demand in the bullion market.
“I have been in the industry for quite long and I have never seen so much demand anytime in the past. The demand is there in jewellery as well as in bullion,” he said.
“We have identified three major reasons for such a huge demand. The first thing is price, the second factor is that in the last two years people have not been buying because of the Covid and third is that gold is regaining the customers' confidence with the introduction of India Good Delivery Mechanism as far as bullion is concerned and mandatory hallmarking as far as jewellery is concerned,” Mehta said.
“So, customers are now coming in the market and asking for the HUID marked jewellery. In comparison to last year, footfalls are almost 2.5 times which is unbelievable as far as the industry standard is concerned,” Mehta added.
He expects gold to touch $2,200 in 1 to 2 years.
“In my opinion, the prices may fall by about 10 per cent initially but will jump by more than 30 per cent in the next 1 to 2 years. I think the bottom for gold prices could be somewhere near $1,650 per ounce but the higher side can be $2,200 per ounce. As far as silver is concerned, the bottom can be $21 per ounce but the higher side can be as high as $29 per ounce,” Mehta added.
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