Commodity Talk: Gold to extend this year’s impressive rally to 2024: Anuj Gupta, HDFC Securities

“We are relatively bullish on gold, and we believe gold will continue to give an impressive return next year. Comex gold can rally to $2,100/$2,180 levels per ounce in 2024 and is expected to trade in a broader range of $1,925 to $2,180 in 2024, Anuj Gupta, Head Commodity & Currency, HDFC Securities said. The MCX gold price is expected to trade in the range of Rs 57,500 to Rs 67,500 with a positive bias, he adds.

While Nifty’s late surge has taken some sheen of the Gold, its 2023 YTD returns at 13% are still impressive. What is your assessment of Gold’s performance this year?
This year, gold prices rallied significantly and hit a new high on MCX and Comex, as haven demand continued to offer support for the gold price due to geopolitical instability and economic uncertainty. Furthermore, active central bank buying and the Fed’s pause in interest rate hikes and expectations on probable cutbacks in 2024 contributed to gold’s surge in 2023.

December has been lackluster in terms of net gains but in your view are there opportunities now for traders/investors to make fresh moves?
The gold price corrected almost 2.5% from its recent peak. We believe that any correction in the gold price between 3% to 5% is a good opportunity for those investors who invest in gold with a medium- to long-term outlook.

What is the outlook of gold for 2024 and what levels do you see yellow metal hitting by the end of 2024?
Fed policy will continue to shape the outlook for gold prices in the coming year. Fed rate cuts will begin in March or May, with a total of 75 basis point expectations of rate cuts next year, followed by another 100 basis point cuts in 2025. This should help gold’s upward trend. Furthermore, ongoing geopolitical unrest and recession fear also provide support for gold as a safe haven.

We are relatively bullish on gold, and we believe gold will continue to give an impressive return next year. Comex gold can rally to $2100/$2180 levels per ounce in 2024 and is expected to trade in a broader range of $1925 to $2180 in 2024. The MCX gold price is expected to trade in the range of Rs 57500 to Rs 67,500 with a positive bias.

What is your assessment of the performance of silver this year?
In the domestic market, MCX Silver has delivered almost 7.50% this year. Silver has underperformed compared to gold, as silver contributed 50% in bullion and 50% in the base metals category. We have seen base metals performance remaining weak in 2023 due to China’s economy suffering from a property market crisis and weak demand, which kept silver prices low.
What is the outlook for next year?
We anticipate silver will follow gold’s trend and move higher in 2024. Long-term fundamentals are still positive for silver, as global demand is likely to outshine due to the faster adoption of green energy. From the level specific, Comex silver will rise to $30 per ounce; a decisive breakout above the $30 level will open further upside towards $33/$37.0. It has support at $19.80.What should be the asset allocation for next year considering that a lot of hype is already being generated around the prospects of equity markets next year?
Despite the strong momentum in domestic equity markets, we recommend investors should always keep their portfolios well diversified for unseen events. Gold is considered a safe haven asset class that provides protection during times of uncertainty. Ideally, investors should keep 10% to 20% of their total portfolio value in gold.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)