Gold could climb to $4,700-$4,800 by the next Samvat as rising US government debt and persistent central bank purchases drive renewed allocations to bullion, according to Kunal Shah, Vice President and Head of Commodities Research at Nirmal Bang Securities.
After correcting sharply from its peak of $5,500 to around $4,000, the precious metal offers an attractive buying opportunity for investors navigating rising global uncertainties, Shah said.
The bullish outlook is underpinned by the rapid expansion of US government debt. According to Shah, US borrowing has increased by $1 trillion, $1.4 trillion and $1.5 trillion over the past three years, respectively, and is now growing at an annual pace of around $2 trillion. In the last four months alone, the US debt burden has risen by $1.2 trillion.
This fiscal expansion is also accompanied by liquidity support, including an estimated $100 billion injected into the market through bond purchases in October.
“This is the ultimate time. This is one of the best times to start reallocating your portfolio towards gold and silver,” Shah said.
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Gold seen at $4,800 by next Samvat; Kunal Shah calls correction a buying opportunity
Silver is also expected to recover, with Shah’s conservative estimate placing prices at $70-$75 by the next Samvat, compared with the current level of around $48. The metal has corrected sharply from its peak of $120.
Meanwhile, crude oil prices are likely to remain subdued or face further pressure. Earlier concerns about oil surging to $130-$140 per barrel, alongside US inflation rising to 4.5%-5%, have eased.
Shah believes expectations of a weaker geopolitical risk premium are also weighing on the outlook for crude. He pointed to the possibility of US President Donald Trump’s reduced political influence following the midterm election losses, which could lower the likelihood of major geopolitical disruptions and conflicts, keeping energy prices in check.
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