Gold prices expected to reach $2,000 in the next 12-15 months: Motilal Oswal

Gold prices are expected to go up in the near future as it could benefit from the elevated risk environment, rising inflation, slower growth and low interest rates. "Correction from short term hurdles could be used as a buying opportunity although over the course of next 12-15 months an extended rally could be seen over $2,000 (per ounce) with a potential to make new life time highs," says Navneet Damani, VP - Commodity & Currency Research, Motilal Oswal Financial Services. One ounce is equal to 28.34 grams.

Gold finished the year 2021 approximately 4 per cent lower, closing at $1,806/oz, as prices rallied towards the year-end on the back of the rapidly spreading Omicron variant. Currently gold is trading at Rs 48,535 (per 10 gms) in India. In USD the current gold prices are at $1840/oz.

The Motilal Oswal report states that inflation has been one of the main highlights for 2021 and it could continue to be in the limelight next year too. The rising inflationary expectations were increasing the distress in the market for a long time, although the panic in the market started once US Governor Powell also acknowledged the same and started to act on it. "There are expectations that even with major central banks measures to calm these expectations, rise in crude oil prices and continuing panic amidst the supply chain issues will continue to support the inflationary expectations. And hence, gold prices have been holding firm even after the Fed's tapering announcement and three rate hike expectations. Market participants did surely discount the next year's rate hike expectations although prices did recover from that fall,"says Damani.