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videos | IST

Expect 7-8% return on gold in 2020, says Surendra Mehta of IBJA

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The precious metal prices then and they have had the best of the year after the last ten years. We have seen this kind of strong gains coming in. so gold prices are closing this year with nearly 15 percent of gains in the global market, 21 percent up in the Indian markets. Silver also is 10 percent up for this year, but even better performance has come in from platinum and palladium where we have seen almost 55 percent gains coming in and record highs are what we have seen in palladium and in gold prices in this year.

The precious metal prices then and they have had the best of the year after the last ten years. We have seen this kind of strong gains coming in. so gold prices are closing this year with nearly 15 percent of gains in the global market, 21 percent up in the Indian markets. Silver also is 10 percent up for this year, but even better performance has come in from platinum and palladium where we have seen almost 55 percent gains coming in and record highs are what we have seen in palladium and in gold prices in this year.
How is 2020 looking, what fundamental factors should we be watching out for and what are the price strategies? CNBC-TV18 spoke to  Surendra Mehta, National Secretary of India Bullion & Jewellers Assoc to get these answers.
Speaking about the gold wave in 2019 Surendra Mehta said, “We have reached to a level where we can simply see that anybody who is investing in gold, is getting a return, may be that return is roughly on an average it runs 6-7 percent on a Year-to-Year basis if the long period is calculated. Last 5-6 years the gold has given almost 54 percent return. In the last one year itself, it has given about 20 percent return.”
He further said, “Historically gold says that it is a well-wisher commodity for all the household, everybody must invest in gold, this is my recommendation and I am still looking at a gold return of about 7-8 percent in 2020.”
Speaking about the demand for gold he said, “In 2019 the entire economy was in a liquidity crisis, there were after demonetisation and GST and specifically after the duty hike from 10-12.5 percent the demand was little down but with the wedding season on and after the Diwali 2019 it is picking up. The shortfall in the demand will be made good in 2020. So I am expecting a much better import number in 2020.”
Speaking about reforms and policy changes he said, “We have demanded the reduction in the import duty from 10 percent to maybe 2 percent in the phased manner, but somehow government increased the duty to 12.5 percent. We want that this duty is rolled back to 10 percent and then in the phased manner it gets reduced. The second demand is setting up a spot exchange which is the need of the hour. If we have to compete with countries like China in terms of the gold market we need to have a very strong commodity exchange in the country and also bullion bank which is the need of the hour.”