Investment demand for gold is likely to shift from coins and bars to paper gold such as sovereign gold bond in 2018, according to experts, as the precious metal is unlikely to appreciate in value in a hurry.
Bankers and analysts expect gold price to stay in the Rs 28,500-29,000 per 10 gm range in the first half of the year and possibly cross Rs 30,000 per 10 gm sometime during the second half.
“As of now there is no trigger point for investment demand for gold to rise as the precious metal may not show an upswing unless there is huge uncertainty in the market,” said Shekhar Bhandari, business head for global transaction (banking and precious metals) at Kotak Mahindra BankBSE -0.74 %.
“All eyes will be on US President Donald Trump’s policies and geopolitical tensions. However, Indian market is maturing and investment demand may shift to sovereign gold bond to stay invested for a longer period of time with steady returns,” he said.
In the third quarter of 2017, investment demand for gold in India fell 23 per cent from a year ago to 31 tonnes, according to a World Gold Council (WGC) report. It said that in the first three quarters of the calendar year investment demand fell 4.7 per cent from a year ago to 99.9 tonnes.
“Gold will remain in the range of $1,260-$1,380 per ounce in the global markets. Rupee got stronger in 2017 and we are expecting rupee to remain strong in 2018 against the dollar,” the report said.
