Gold to Surge Rapidly: Could It Reach $4,800 by Next Samvat?

Gold is currently trading below the record high it reached in January, but experts suggest that the precious metal could see a surge of up to 20% in the near future.

While gold is currently trading below its January record high, its price could soon see a sharp rally. This is not just our view; it is the opinion of experts. According to a report by CNBC-TV18, Kunal Shah, Head of Commodities Research at Nirmal Bang Securities, states that rising US government debt and sustained buying by central banks could drive further investment in gold, potentially pushing its price to $4,700–$4,800 by the next Samvat (the traditional Hindu financial year).

Kunal Shah notes that after falling from a peak of $5,500 to around $4,000, gold currently presents a good buying opportunity for investors seeking investment avenues amidst growing global uncertainty. It is worth noting that in January of this year, gold surpassed the historic $5,500 mark for the first time. Compared to that peak, gold is currently trading about 20% lower in the international market, hovering around $4,400 per ounce. Kunal Shah believes this decline offers a significant opportunity for investors.

The Link Between Rising US Debt and Gold

US government debt is growing at a rate of approximately $2 trillion annually. As a nation’s debt increases, its currency tends to weaken in the global market. When investors perceive that a country’s currency is weakening, they shift their capital into safer assets. For instance, if investors perceive an increasing risk associated with the US dollar or American bonds, they may withdraw their capital and invest it in gold—an asset widely regarded as a "safe haven." As the demand for gold rises, its price naturally begins to climb.

Continuous Buying by Central Banks

Central banks across the globe—including the Reserve Bank of India (RBI) and the People’s Bank of China (PBOC)—are actively reducing their reliance on the US dollar. In doing so, they are consistently adding significant quantities of gold to their foreign exchange reserves, keeping the market demand for gold at record levels.

Following the outbreak of the war between Russia and Ukraine, the United States and several other Western nations seized approximately $300 billion of Russia’s foreign exchange reserves. Learning from this, many central banks are now shifting their focus toward gold. As an asset that is not subject to the control of any specific government or bound by national borders, gold is considered the safest store of value, maintaining a consistent worth.