Gold price above Rs 1 lakh. Will Quant MF prediction come true?

Economic Times

14-06-2025

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Amid safe-haven buying due to Israel-Iran tensions and weakness in the dollar index, gold August futures contracts at MCX surged sharply higher by Rs 2,011 or 2.04%, crossing the 1 lakh mark at Rs 1,00,403/10 grams on Friday.The yellow metal's rally seems unstoppable, but a tone of caution still persists as industry experts recently stated that they foresee a potential near-term correction for the yellow metal Quant Mutual Fund , in a recent note, has highlighted that gold may be due for a short-term correction of 12-15% in dollar terms over the next two months. The fund cautioned investors that the metal may have "peaked out" in the short term, noting that while gold prices have surged recently, the momentum could slow down, and a retracement in prices could be on the horizon.Quant Mutual Fund's outlook aligns with broader commodity sentiment, as the firm continues to advise investors to retain exposure to precious metals over the medium to long term.However, with the ongoing momentum, what does the future outlook of gold looks like?Despite the anticipated correction, Quant MF itself maintains a constructive view on gold in the longer run, citing its portfolio strategy centered on cyclical awareness and liquidity trends.As stated by the firm, 'Our medium-term and long-term views are equally constructive and we reiterate that a meaningful percentage of your portfolio should be dedicated towards precious metals.'Adding to the outlook on gold, Renisha Chainani, Head of Research at Augmont, shared her views on gold prices in India. She expressed a cautiously positive medium-term outlook for gold, forecasting prices to stabilize at Rs 97,000 per 10 grams.According to Chainani, the metal's price reflects significant gains over the past year, driven by global geopolitical tensions and central bank buying. However, Chainani anticipates a potential consolidation or a minor correction, with gold possibly dipping to Rs 90,000.Despite this, she emphasized that such a dip could present a buying opportunity, particularly if global interest rates remain paused and geopolitical tensions de-escalate.Chainani further elaborated, 'The fact that central banks (particularly in emerging markets) still show a strong appetite to buy gold and the safe haven asset status for gold remains intact suggests that the appetite for gold will likely persist.'Looking ahead, Chainani anticipates that unless there is a sudden shift in global risk sentiment or aggressive monetary tightening, gold will likely remain firm, potentially heading towards Rs 1,05,000 in the medium term.Echoing a similar sentiment, Manav Modi, Senior Analyst at Motilal Oswal Financial Services , discussed gold's performance in 2025, noting that the yellow metal has surged more than 30% since the beginning of the year, but has also faced significant swings.Modi attributed the volatility to factors such as President Trump's tariff updates, geopolitical tensions, and concerns over global growth. He explained that while tariffs between the US and China were initially introduced and later reduced, the overall uncertainty in the market, coupled with weak economic data points from the US, continued to support gold prices.From a longer-term perspective, Modi sees strong support for gold around Rs 88,000-90,000 per 10 grams, suggesting that investors can maintain a "buy on dips" stance. He projected gold prices could reach Rs 1,00,000-Rs 1,06,000 over the next 12-15 months, provided that key support levels hold.While near-term corrections may be imminent, gold's long-term appeal remains intact. Analysts agree that geopolitical risks, central bank actions, and broader economic uncertainties continue to favor gold as a safe-haven asset.: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)