India increased its gold reserves by 7% in 2019-2020

The Reserve Bank of India increased its gold reserves by 7% during the last fiscal year. This is in comparison to the figures recorded in the previous period. 

Between April 2019 and March 2020, the entity added 40.45 tons of gold to its reserves. This was a total raise of 653.01 tons.

The number places India as the ninth country with the largest gold reserves, with the US, Germany, Italy, France, Russia, China, Switzerland, and Japan.

The value of the reserves totals $ 30,570 million, compared to 23,070 million in the period ending in March 2019.

According to the report of the RBI, more than 50% of the total gold reserves are deposited in vaults located outside its territory. The Bank of England and the Bank for International Settlements (BIS) holds a total of 360.71 tonnes of gold owned by India.

Regarding the percentage that these reserves represent, they have grown from 5.59% to 6.40%.

Gold can hit $ 2,000 an ounce

In recent months, the price of gold exceeded $1700 an ounce. Central banks adopted a monetary policy to face the economic crisis caused by the coronavirus outbreak. This scenario led analysts and industry members to consider the metal’s price to exceed the mythical barrier of $2000 an ounce. 

Kelvin Dushnisky, the CEO of the South African mining company, AngloGold Ashanti, stated that gold might well reach that level. And it would be no surprise. However, his company’s forecasts will not be based on those levels. He further says that the company’s planning is much more conservative. 

AngloGold Ashanti has a portfolio of 14 mines in nine countries. The geographic diversity has helped it contain the impact of the closings required by the Covid-19 control measures. 

Free cash flow increased by 231% compared to the first quarter of 2019, up to 94 million dollars. The cash flow from operating activities grew by 227%, from $67 to $219 million dollars during the same period.

Aakash Doshi, an analyst at Citigroup, expects gold to surpass $2,000 an ounce over the next year or two. This marks it at approximately 22% higher from its current price. For David Roche, the president and global strategist at Independent Strategy, prices can reach that level by the end of 2020. Goldman anticipates gold to touch $1,850 if the coronavirus threat remains.

The precious metal prices have been on an upward trend during the recent expectations of a Fed interest rate cut and intensified geopolitical concerns.