Gold Prices to Fall Below ₹56,000? Morningstar Analyst Predicts Nearly 40% Drop from Record Highs

Gold prices have reached record-breaking highs recently, giving a big boost to investors. In India, 24-carat gold is trading close to ₹90,000 per 10 grams, while globally, prices have gone above $3,100 per ounce. But while gold is glittering, a surprising prediction has grabbed everyone's attention.

A Morningstar analyst has forecasted a massive fall in gold prices, which could bring the rates down sharply—by nearly 40%.

What’s the Prediction?

John Mills, a strategist at Morningstar (a US-based financial research firm), expects gold prices to decline to around $1,820 per ounce globally. If that happens, Indian gold prices could fall to nearly ₹55,000 per 10 grams. This is a huge shift from current levels.

So, what’s causing this gloomy forecast despite gold’s strong run?

Key Reasons Behind the Predicted Price Drop

1. Rising Gold Supply
Gold production has increased significantly. In the second quarter of 2024, mining profits reached $950 per ounce. Countries like Australia have increased their mining output, and the availability of recycled gold has also gone up. Global gold reserves rose by 9%, now standing at over 2,16,265 tonnes.

2. Falling Demand from Central Banks
Central banks were among the biggest buyers of gold in recent years, buying 1,045 tonnes last year. However, a World Gold Council survey revealed that 71% of central banks now plan to either reduce or hold their gold reserves steady.

3. Market Saturation Signs
In 2024 alone, mergers and acquisitions in the gold industry grew by 32%. Historically, such spikes have signaled a market peak. Additionally, gold-backed ETFs (Exchange-Traded Funds) are surging, which often hints at an upcoming price correction.

Experts Divided on Gold’s Future

Not everyone agrees with the bearish outlook. Some major financial institutions remain positive about gold’s prospects:

• Bank of America (BoFA) expects gold to rise to $3,500 per ounce within the next two years.

• Goldman Sachs projects that gold could hit $3,300 per ounce by the end of 2025.

This shows a sharp divide in expert opinions. While some are preparing for a price crash, others believe the rally will continue.

What Should You Do?

If you're planning to buy gold for a wedding, investment, or gifting, this may be the time to wait and watch. If the prediction comes true, gold could become more affordable in the coming months.

For those who already own gold, it might be wise to monitor the market closely before making any decisions to sell or buy more.

Final Thoughts

Whether the price will actually fall by 40% or continue to rise remains to be seen. Global economic trends, inflation, central bank strategies, and geopolitical developments will all play a major role in shaping gold’s future.

For now, gold remains one of the most closely watched commodities in the market—where every move is making headlines.

Reference from:-https://economictimes.indiatimes.com/news/new-updates/gold-prices-to-fall-below-rs-56000-morningstar-analyst-predicts-nearly-40-decline-as-yellow-metal-hit-all-time-high/articleshow/119933345.cms?from=mdr