Gold price may see a rally of around 8-10%, while silver is expected to continue its outperformance over the yellow metal in the new Samvat year 2080, analysts said.

Since Diwali last year, the precious metal prices have risen about 20% so far as the MCX gold rate has surged by over ₹11,000 per 10 grams to around ₹61,000.

Experts believe the fundamentals for the commodity are positive going forward and gold prices may see a further rally of around 8% in the new Samvat year.

“Gold prices have already seen a sharp rally recently on the back of global geo-polictical concerns. The yellow metal seems to be due for a slight correction from here but the downside will be limited. Any dips below ₹61,000 level can be used as a buying opportunity as we expect the gold prices to rally in the long term," said Amit Sajeja, Vice President - Research- Commodities & Currencies - Motilal Oswal Group.

Samvat 2080: Date, timing and significance; all you need to know

Sajeja expects gold prices to range around ₹65,000-67,000 till Diwali next year on the back of strong fundamentals including geopolitical instability in the Middle East and expectation of no further interest rate hike by the US Federal Reserve.

“Gold prices are expected to rally around 8-10% further, reaching around ₹65,000 per 10 grams level next Diwali. The yellow metal may also test ₹67,000 levels, but on an average, the gold price is estimated to be around ₹65,000 level next Diwali," Sajeja said.

He believes the ongoing geo-political worries will continue supporting gold prices. We are also likely to see the end of the interest rate hike cycle in the US, a big positive for gold, which the markets have already discounted, he added.

Additionally, Sajeja pointed out increasing gold buying by global central banks, that will further aid the precious metal prices.

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Gold buying by central banks around the world has been at a historic pace, lifting the gold demand (excluding OTC) in the July-September quarter at 1,147 tonnes, 8% higher than its five-year average.

According to the World Gold Council’s Q3 Gold Demand Trends report, central banks have bought a net 800 tonnes of gold year-to-date (YTD), the highest on record for that nine-month period.

Read here: Gold prices to get support as central banks maintain historic buying in Q3: World Gold Council

On the other hand, silver prices have also jumped anywhere around 25% since last Diwali, outperforming the yellow metal. Analysts believe silver prices to continue this outperformance over gold for the next Samvat.

“Silver prices may give anywhere around 12% to 13% returns in the next Samvat year. We expect MCX silver price to be around ₹80,000 per kg next Diwali. The white metal may also test the level of around ₹82,000," Sajeja said.

Increasing industrial demand for silver, especially for solar panels, new green technologies, the rise of electric vehicles and the shift to 5G cellular service are touted to be huge demand vectors for silver.

Gold prices may hit ₹61,000 per 10 grams, Silver may touch ₹75,000 this Diwali: Experts

A growing shift towards Heterojunction technology (HJT), a solar panel production method which requires more use of silver, is expected to drive the demand for the metal.

“HJT or Heterojunction Technology is more efficient as compared to PERC or TopCon used currently. However, it requires about 50% more silver paste than currently being used. This could raise silver demand for making solar panels. Hence, the consumption of silver is expected to keep growing in the next 3-4 years," Sajeja said.

Overall, analysts are optimistic about the prospects of both gold and silver prices in the upcoming Samvat year. Gold prices are expected to continue their upward trend, with a potential 8-10% rally, driven by geopolitical concerns, expectations of a pause in US interest rate hikes and central bank buying. Silver, on the other hand, is poised to outperform gold, with predictions of a 12-13% return, primarily due to increasing industrial demand.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.