Emkay Wealth Sees Further Upside in Gold Despite Recent Volatility

According to Emkay Wealth Management, the recent profit booking in gold and silver may have caused some volatility, but the broader uptrend in precious metals remains intact. The wealth manager expects a further 12% upside for gold, while silver could face resistance at $68 and $74 per ounce. Gold has found strong support around $4,060 an ounce, while silver has held the $58 an ounce level over the past four to six weeks.

The resilience of both metals despite recent corrections suggests that the current consolidation could provide a base for the next phase of the cycle. Vivek Choksey, Regional Manager at Emkay Wealth Management in Ahmedabad, stated that 'Gold and silver have continued to demonstrate resilience despite profit booking and uncertainty around the interest-rate trajectory.'

Silver has delivered stronger returns than gold over the past year, but with higher volatility. As of July 31, ICICI Pru Silver ETF had returned 95.24%, while Nippon India Silver ETF returned 94.55%. Over three years, the two schemes delivered 42.09% and 41.71%, respectively.

Gold's long-term outlook remains supported by structural factors, including continued central bank buying and demand to diversify reserves. The current gold rally has completed only part of its average historical cyclical period, suggesting that the longer-term cycle could have further room to run. A sustained shift towards a softer global interest-rate environment could provide another boost to precious metals.