Gold has witnessed a significant surge in price this month, with the Multi Commodity Exchange (MCX) reaching a peak of ₹66,943 per 10 grams last week, spurred by three interest rate cuts by the US Federal Reserve in 2024. However, profit-booking led to a retracement of over ₹1,000 per gram, with gold closing at ₹65,870 on Friday. Despite this retracement, the MCX gold rate recorded a 5.30 percent rise month-to-date, while spot gold prices saw a 6 percent increase in the international market.
According to experts in the commodity market, gold prices pulled back from recent highs due to profit-booking but are expected to regain momentum, potentially reaching ₹67,500 on MCX and $2,230 per ounce internationally. Similarly, forecasts suggest MCX silver rates could touch ₹78,000 per kilogram, with international rates reaching $28 per ounce.
Shashank Pal, Chief Business Officer at PL Wealth Management, anticipates continued strength in gold prices throughout 2024, driven by anticipated US Fed rate cuts stimulating inflation, making gold an attractive hedge. Pal also highlights factors such as sluggish economic growth, geopolitical uncertainties, and forthcoming elections in over 50 countries as drivers pushing investors toward safer options like gold.
Commenting on the retracement from all-time highs, Anuj Gupta, Head of Commodity & Currency at HDFC Securities, notes the traditional trend of correction post-record highs as traders aim to maintain market premiums. However, Gupta emphasizes the ongoing demand for gold by central banks worldwide and rising crude oil prices as factors that may limit corrections in gold and silver prices, suggesting a buy-on-dips strategy.
Pal advises investors to monitor US dollar rates closely, highlighting their impact on gold prices, alongside geopolitical factors and demand-supply dynamics. He suggests that gold remains a favorable investment option, expecting further upside with intermittent volatility over the next 12-18 months.
With key triggers such as inflation trends, geopolitical developments, and central bank purchases influencing gold prices, investors are advised to stay vigilant in navigating the market.
