LIVE TV
ZEE Business
ZEE BUSINESS
हिंदी में पढ़ें  हिंदी में पढ़ें
Live TV
Live TV
  • Home
  • Budget 2021
  • Personal Finance
    • PPF
    • Mutual Funds
    • Income tax
    • EPFO
    • Income Tax Calculator
    • Personal Loan Calculator
    • Car Loan Calculator
    • Home Loan Calculator
    • SIP calculator
    • SWP Calculator
    • MF Returns Calculator
    • Lumpsum Calculator
  • India
    • Companies
    • Property
    • Startups
    • Uidai
  • Economy
    • Aviation
  • Tech
    • Mobiles
    • Apps
  • Auto
    • Cars
    • Bikes
  • Markets
    • Commodities
    • Currency
  • Jobs
  • Indian Railways
  • World
    • Economy
    • Politics
    • Markets
  • videos
  • photos
  • Authors
  • More ...
    • VIDEOS
    • PHOTOS
Read in App
Business News » Personal Finance News

Gold prices: Looking to buy? Good news! Banner Year for Gold expected, set for record, says CS

Credit Suisse thinks any near-term pullback in gold prices due to COVID-19 vaccine approvals and rollout is a good entry point because the economy remains fragile and the post-pandemic recovery will be gradual at best, meaning a low rate environment and an elevated gold price environment are here to stay at least for the next few years.

  • Twitter
  • Facebook
  • Linkedin
  • whatapp
  • View in App
Gold prices: Looking to buy? Good news! Banner Year for Gold expected, set for record, says CS
Credit Suisse highlights quicker than expected US economic recovery, a more hawkish Fed (resulting from a quicker recovery), and lingering weakness in retail demand for gold (particularly in India/China): Reuters
Reported By: ZeeBiz WebTeam
Written By: Rahul Kamdar
Edited By: Harish Dugh
Updated: Wed, Dec 16, 2020
01:30 pm
Mumbai, ZeeBiz WebDesk
RELATED NEWS
Gold Price Outlook: ICICI Securities expects rates to remain in the range of Rs 48400- 48800 Gold Price Outlook: ICICI Securities expects rates to remain in the range of Rs 48400- 48800
Gold hovers near one-month low after China, US agree on tariff roll-back Gold hovers near one-month low after China, US agree on tariff roll-back
Gold price outlook: Invest after Pitrupaksha to make profit because rates will skyrocket to this BIG amount ahead of Dhanteras Gold price outlook: Invest after Pitrupaksha to make profit because rates will skyrocket to this BIG amount ahead of Dhanteras
Gold price rises post-US Fed interest rate cut; palladium sets record Gold price rises post-US Fed interest rate cut; palladium sets record
Middle East tensions: Gold gains 1% as attack on Saudi oil facilities boosts safe-haven assets Middle East tensions: Gold gains 1% as attack on Saudi oil facilities boosts safe-haven assets

Gold price to continue its upward trajectory and average $ 2,100/oz in 2021 (peaking at $2,200/oz in Q3/21), down from our previous estimate of $2,500/oz, but still a record average. Credit Suisse says if the US TIPS yield falls to -2.5%, gold could move to $2,500/oz. The main supporting factor continues to be unprecedented and very accommodative monetary and expansionary fiscal policy globally and in particular in the US, in response to the economic fallout from COVID-19. 

Gold Price: You Should Focus on This To Gain More

Investors should focus on US real rates to determine gold price trajectory as this is the strongest historical correlation, and it incorporates interest rates and inflation. 

Credit Suisse thinks any near-term pullback in gold prices due to COVID-19 vaccine approvals and rollout is a good entry point because the economy remains fragile and the post-pandemic recovery will be gradual at best, meaning a low rate environment and an elevated gold price environment are here to stay at least for the next few years. 

Credit Suisse highlights quicker than expected US economic recovery, a more hawkish Fed (resulting from a quicker recovery), and lingering weakness in retail demand for gold (particularly in India/China).

Rational capital allocation:

In a historically high gold price environment, so far Credit Suisse have seen capital discipline from the senior and intermediate gold producers, with a focus on returning more capital to shareholders, mostly via higher dividends. This has been a conscious effort on the part of management teams to avoid the capital allocation mistakes that characterized the last gold bull cycle, specifically high premium M&A and/or capex-intensive growth projects that assume high gold prices. Notably, every senior gold producer in our coverage raised dividends in the past year on strong FCF at prevailing gold prices. Average 2021 FCF yield for the senior gold producers is 8% and 16% for the intermediates (though this can move around depending on new project approvals and capex).

Capital discipline will be the differentiator:

See Zee Business Live TV Streaming Below:

Credit Suisse thinks that the key differentiator for gold companies in 2021 will be capital allocation discipline. To the extent that gold miners continue to generate significant FCF and return capital to shareholders, we should see valuation multiples expand (currently trending below 10-year average). However, if companies begin to use higher reserve prices (currently $1,200-1,300/oz), complete acquisitions at >10% premiums, and approve capex-intensive, greenfield projects, then expect multiples to contract. There is an inherent need for miners to spend on exploration and development to replace reserves, but investors in this environment prefer low-capital, brownfield projects to maximize cash flow while increasing reserve life.

 

Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.

TAGS:
gold pricesGold price in India
RELATED NEWS
Gold Price Outlook: ICICI Securities expects rates to remain in the range of Rs 48400- 48800 Gold Price Outlook: ICICI Securities expects rates to remain in the range of Rs 48400- 48800
Gold hovers near one-month low after China, US agree on tariff roll-back Gold hovers near one-month low after China, US agree on tariff roll-back
Gold price outlook: Invest after Pitrupaksha to make profit because rates will skyrocket to this BIG amount ahead of Dhanteras Gold price outlook: Invest after Pitrupaksha to make profit because rates will skyrocket to this BIG amount ahead of Dhanteras
Gold price rises post-US Fed interest rate cut; palladium sets record Gold price rises post-US Fed interest rate cut; palladium sets record
Middle East tensions: Gold gains 1% as attack on Saudi oil facilities boosts safe-haven assets Middle East tensions: Gold gains 1% as attack on Saudi oil facilities boosts safe-haven assets

LATEST NEWS

CBSE Class 10, 12 exams 2021 cancel request: BIG Assurance comes from CBSE; This is what Board says now

Cancel Board Exam 2021: Now, Sonu Sood requests this to everyone amid rising Covid-19 cases

Fed up of Gurgaon traffic problems? BIG RELIEF for Gurugram commuters!

PUBG Mobile 1.4 beta update global version: Check APK download link, vehicle, game mode for global users

Most downloaded non-gaming app in March: WhatsApp, Facebook, Instagram and Messenger in top 5, but this is the No. 1

Karnataka College and University Exam News Today: Deputy CM said THIS regarding exams in colleges and universities in the state - check all details here

CBSE Board Exam 2021: Students, do not miss this latest news! Will CBSE CANCEL class 10 class 12 board exams? Check UPDATES here

Gold Price Today 12-04-2021: Resistance for Gold MCX is Rs 46819 and 46932 while the support is at Rs 46394 and Rs 46550

Cipla is the TOP gainer on Nifty today; expert pegs price target between Rs 950-Rs 1000 going forward

In chat with Anil Singhvi, analyst Vikas Sethi recommends Divi's Lab, Infosys as top buys for big gains

  • India News
  • World News
  • Companies News
  • Market News
  • Personal Finance News
  • Technology News
  • Automobile News
  • Small Business News
  • Income Tax Calculator
  • Live TV
  • Videos
  • Photos
  • Author
  • Rss Feed
  • Advertise with us
  • Privacy Policy
  • Legal Disclaimer

Latest Trending Updates

  • EPFO
  • Budget 2020
  • Income Tax Return
  • Auto Expo 2020
  • Home Loan
  • Business News

Trending Topics

  • Income Tax
  • income Tax Calculator
  • 7th Pay Commission
  • Reserve Bank of India
  • GST
  • Latest Business News

Follow us on

zeebiz
zeebiz

Partner Sites

  • Zee News
  • Hindi News
  • Marathi News
  • Bengali News
  • Tamil News
  • Malayalam News
  • Gujarati News
  • Telugu News
  • Kannada News
  • DNA
  • WION
Copyright © Zee Media Corporation Ltd. All rights reserved