Gold likely to surge to Rs 85,700 in Samvat 2081, says Ventura Securities

Gold is likely to surge to Rs 85,700 per 10 grams in Samvat 2081, says Ventura Securities. Gold is proving to be a multi-faceted hedge, now not only acting as a traditional safe haven asset but also countering potential economic sanctions, Ventura Securities said in a report. With the US economy facing fiscal challenges and geopolitical tensions on the rise globally, gold’s appeal has heightened even as inflation moderates. The shift has propelled gold prices to new heights despite inflationary pressures cooling, with medium-term price adjustments expected to continue.

Gold’s recent performance has been significant, trading at near-record highs of $2,772 per ounce (Rs. 78,900) — a 34 per cent year-to-date gain. Ventura Securities forecasts potential rise for MCX gold futures hitting Rs 81,800-Rs. 85,700 per 10 grams and Comex projections of $2,950 to $3,000 per ounce.

Similarly, silver has also surged hitting its highest level since 2012 with a remarkable 41 per cent year-to-date increase. Ventura Securities expects silver prices to range between Rs 1,06,000 to Rs 1,20,000 per kg and Comex projections of $35-$40 per ounce.

With Federal Reserve rate cuts expected at a tempered pace, Ventura Securities recommends a "buy on dips" strategy, especially for MCX futures. For those looking to diversify, Sovereign Gold Bonds (SGBs) remain appealing, offering a guaranteed 2.5 per cent annual return, though limited liquidity can be a drawback. ETFs and gold mutual funds present an alternative, though they lack the SGB premium.

Political and economic factors are also influencing gold and silver prices. As the US election approaches, markets are eyeing Republican candidate Donald Trump’s tax cut proposals, which could widen the US deficit, potentially strengthening gold. Under Trump, renewed tariffs and a dollar depreciation strategy would support exporters, albeit with inflationary pressures. A victory for Democratic candidate Kamala Harris would likely reduce this volatility, presenting a more stable policy approach.

Global Demand and Silver’s Surge

Ventura’s report also highlights silver’s bullish outlook, particularly with demand in military and renewable energy sectors. The US Silver Institute projects a 215-million-ounce deficit in 2024 due to increased demand from China’s solar grid plans and India's renewable energy investments. Additionally, central banks are increasing gold reserves, with holdings rising from 3 per cent to 10 per cent of total reserves over the past decade.

Gold remains a key asset in volatile times, Ventura notes, especially as Treasury yields and debt levels continue to climb. The metal serves as a long-term allocation for investors, often maintaining a 10-12 per cent stake in diversified portfolios to safeguard against market fluctuations.