Gold could rally 10% from Wednesday record high: Kotak Bank

Gold of 995 purity (24 carat), which hit a record high of Rs 50,392.75 per 10 gm on Wednesday including taxes, could rally another 10% in the next six-nine months, said Shekhar Bhandari, global transaction banking head, Kotak Mahindra Bank."Rising US-China trade tensions, negative real rates by central bankers and fallout from Covid would drive gold prices which are already up 41% year on year," said Bhandari. He added that demand for jewellery had improved in states like Karnataka, Tamil Nadu ex-Chennai, Kerala, West Bengal and Punjab post the national lockdown relaxation from June. Even Titan said that demand revival for its jewellery division was better than envisaged in May and June in its latest quarterly update. Bhandari added that jewellery clients of his bank who had availed of metal loans were "sitting pretty" as they had priced the gold prior to the lockdown in March -April and had opted for the moratorium that's been extended for three months through August end. Since opting for the moratorium, gold has shot up so they were benefiting from huge inventory gain as they had already priced the gold. Invest demand for the metal has improved with domestic gold ETFs witnessing inflows of Rs 494 crore in June.