Gold rises 29% so far this year, may soar to Rs 8,000/g by December
Mon Sep 30 2024
Bullion price continued to sizzle for the third day on the back of global rally that began since the Ukraine war and has gained an unprecedented speed since the US Federal Reserves cut the interest by 50 bps—first time in four years.
Every analyst is expecting the rally to continue for some more time ranging from $2,800-3,000/ounce or Rs 7,550-8,000 per gram by December. The yellow metal has already gained 29% this year after a 20% rally in the previous year.
Gold continued to gain on Friday, adding Rs 35/g which took the retail price to Rs 7,575/g for pure gold. Similarly, silver also shot up by Rs 1,705/kg to Rs 92,522, according the closing price details on the Indian Bullion & Jewellers Association website.
Since the rate cut hope gained traction, gold has been performing well in the global markets, already reaching the yearend target of $2700/ounce. After crossing the sensitive price barrier, the metal is trading today at $2691/ounce.
In a note on Friday, a day after the metal crossed the $2700/ounce mark on the Chicago Mercantile Exchange, global agency Fitch Solutions said they are expecting the price to jump to $2800/ounce by the end of the year.
“We are revising up our 2024 gold price forecast from $2,250/oz to$2,375/oz, expecting gold prices to trade within the range of $2,500-2,800/oz in the coming months,” Fitch Solutions said.
This marks a departure from the $1,943/oz average seen in 2023. We are now neutral to bullish towards gold for Q4, 2024- Q1, 2025 as prices receive support from the US Fed’s rate cuts and high levels of geopolitical tension. That said, we note some downside risks to gold, especially if Trump wins the forthcoming US elections, which would support the US dollar and pressure gold.
“In the longer term, we expect gold prices to remain elevated in the coming years compared to pre-Covid levels,” the note concluded.
According to Icra Ratings, gold prices are buoyed by the evolving global economic and geopolitical environment, including ongoing tensions in West Asia, rising investment demand for gold amid expectations of more interest rate cuts, and the massive central bank purchases led by China and India. All this had the average domestic price surging 14% in FY24 and another 29% so far this year.
Source: https://www.newindianexpress.com/