Since December 2013 Gold was in correction mode. It came
down from 35000 to 25000 in last 3 years. As per my expectation it made a base
around 25000. Now it will start rallying again.
Gold will always outperform when Global markets are in financial trouble.
Currently all world economies are facing big financial problems. All major central banks have pumped liquidity in to the economies by lowering
interest rates and through Quantitative easing. Still economies are not
performing that well. So countries have started depreciating their currencies
to support exports.
Technically also Gold has made bottom near 24500-25000 levels.
Now it will be very difficult for Gold to break that level easily. Momentum
indicators are also giving Buy signal on Daily, Weekly and Monthly charts.
To conclude, one should Buy Gold Future at CMP-26750 with
Stop Loss Below 25500 for target of 28500, 31000 in next few months. Gold will
touch 54000 by 2020.
Those who want to take position in spot market,
they can buy Sovereign Gold Bonds issued by RBI which will give 2.75% interest
over and above normal capital gains.