Gold prices have once again started gaining upward momentum globally, and prominent financial institutions are now projecting historic highs for the yellow metal. In a significant development, Chris Wood, Global Head of Equity Strategy at Jefferies, has issued a massive price target for gold, suggesting that prices could potentially double from current levels in the long run.
According to Wood, international gold prices could soar up to $10,000 per ounce. Given the current trading levels, this represents an anticipated surge of nearly 130 percent. Financial analysts note that efforts by authorities to control US bond yields could weaken the US dollar, creating a highly favorable macroeconomic environment for gold to outperform other asset classes.
How Much Will Gold Cost in India?
Gold is currently trading at around $4,349 per ounce internationally. If it climbs to the projected $10,000 mark, it would effectively multiply by 2.3 times. Translating this to the domestic scenario, according to the Multi Commodity Exchange (MCX) in India where gold is currently hovering around Rs 1.51 लाख per 10 grams, such an exponential rise could push the domestic price of gold up to approximately Rs 3.47 लाख per 10 grams.
"The market will soon realize that the US Federal Reserve does not have the capacity to keep raising interest rates indefinitely. The US fiscal deficit is simply too high for the country to sustain elevated bond yields, which will eventually weaken the dollar and benefit gold." — Chris Wood, Global Head of Equity Strategy, Jefferies
Weakening US Dollar and Fiscal Deficit
Wood emphasizes that macroeconomic pressures, particularly America's mounting fiscal deficit and unsustainable bond yields, will force policy corrections. As attempts are made to suppress high bond yields, the US dollar is expected to weaken over time. Historically, a softer dollar acts as a major catalyst for skyrocketing precious metal prices.
Long-Term Benefits for Indian Households
Experts point out that a prolonged period of a weaker US dollar will heavily benefit Indian households due to the massive private gold reserves held by families across the country. As international valuations soar, the total worth of domestic gold holdings will scale new heights, providing a robust financial cushion. However, retail investors are always advised to consult financial advisors before making substantial investment commitments in commodity markets.
