According to financial services and market research firm Motilal Oswal Financial Services, the demand for gold will improve in the fourth quarter of this calendar year due to the policy of keeping the interest rates of central banks cheaper and the last buying season in India. A recent report at the firm described gold as a good option for long-term investment. According to a report released by the firm, gold has given a return of 159 per cent in India in the last decade, while the domestic stock index Nifty has returned 93 per cent during this period. The report says that the price of gold can go up to Rs 65-67 thousand per ten grams in the long term.
Demand fell 30 percent in the third quarter
The report said that the demand for gold is likely to increase in the fourth quarter after falling 30 per cent in the third quarter, as jewelery purchases will pick up during this period. The report predicts that the coming months after the US election will be crucial to fixing the price of gold and meanwhile central banks’ stance, low interest rates, the impact of the Kovid-19 epidemic and other concerns may affect prices However, the prospects for bullion are good.
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According to the report, central banks cut interest rates to support their economies and increased the flow of money in the market. Global interest rates are currently around the zero level and are expected to remain low for some time. Jerome Powell, head of the US Fed Reserve, mentioned in his previous policy statement that this means that interest rates may not go in the negative direction, but may remain at low levels until 2023.
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The report cites World Gold Council (WCG) projections that gold demand in India is likely to pick up in the fourth quarter after falling 30% in the third quarter as retail jewelery purchases are expected to strengthen due to the festivals is. They hope that the fourth quarter will be better than the third quarter due to growing mothers and festivals.
Last year, there was a record 194.3 tonnes demand
Demand in India during the fourth quarter may be lower than the previous year’s record of 194.3 tonnes as consumers are struggling to keep pace with record high prices. India’s gold demand fell 49% to 252.4 tonnes in the first three quarters compared to a year earlier, as the lockdown caused by coronavirus has affected demand for jewelery.
51% jump in demand for coins and bars
Demand for coins and bars in the market, known as investment demand, jumped 51% in the third quarter as rising prices attracted investors, which maintained high prices. Gold has reached the highest level this year. The yellow metal rose to $ 2085 an ounce abroad and Rs 56,400 per ten gram at the commodity exchange in India, but prices have come down amid global uncertainties.