The prices of gold are likely to retest the Rs 53,000 level in 2021 on the back of sustained liquidity infusion by global central banks in the markets, analysts said.
Speaking to CNBC-TV18, Kunal Shah of Nirmal Bang said that he was bullish on precious metals for 2021 and expected that the prices of gold to rise to Rs 52,000-53,000 per 10 grams levels on MCX.
Shah also expects silver prices to move up and test Rs 74,000-75,000 per kg level in the domestic market next year.
“In the near term, the yellow metal can go down by another 1-2 percent, but the long term trend definitely remains bullish because all the major central bankers have indicated that their balance sheet will expand further. So, even if there is a vaccine, the bigger trigger for gold to move up is the major monetary debasement,” Shah said.
Shah suggests re-entering in a long position on gold at around Rs 49,500 level for a target of Rs 52,000-53,000 conservatively in 2021. Silver can be bought at Rs 64,000-65,000 levels, he said.
On base metals, Shah said, “Tighter supply, strong demand, and China continuing to hoard commodities are causing metal prices to move higher. During the last week of the year, we are seeing some profit-taking. This shall be used as a good opportunity to again go long as the view for metals in 2021 is very bullish.”
Meanwhile, Shah expects WTI prices to fall to USD 40/bbl level and recommends to accumulate at these levels.