MUMBAI, Dec 31: Experts predict that the price of gold, which will continue to shine in 2024, will reach Rs 70,000 per 10 grammes on the domestic market due to the rupee’s stability, geopolitical unpredictability, and the slowing growth of the world economy. The price of yellow metal is currently trading at about USD 2,058 per ounce on the international market and Rs 63,060 per 10 grammes on the commodities stock exchange MCX, while the rupee is trading above 83 against the US dollar. Due to renewed global tensions in the Middle East, prices spiked in early December, leading emerging market participants to believe that the cycle of rate hikes had essentially come to an end.Even though the price of gold has been fluctuating this year, on May 4 it hit a new high in the domestic market, reaching Rs 61,845 per 10 grammes, and USD 2,083 an ounce in the international markets. Later, on November 16, Commtrendz Research Director Gnanasekar Thiagarajan revealed that the yellow metal reached a record high of Rs 61,914 per 10 grammes. He claimed that gold reached an all-time high of USD 2,140 for an ounce on December 4 and Rs 64,063 for 10 grammes on December 4, reflecting its appeal as a safe haven.“If the rupee remains stable, we anticipate an eventual rise to USD 2,400 in 2024, and gold is likely to reach levels around Rs 70,000.” Foreign Institutional Investors (FIIs) are anticipated to reduce their holdings, which could further support domestic gold prices, he said. As a result, the rupee could weaken as India prepares for elections. Higher domestic prices in China and India may provide challenges for retail jewellery buyers, but if the current momentum continues, central banks’ demand may surpass last year’s record. This was stated by Ravindra Rao, vice president and head of commodities research at Kotak Securities.Rao pointed out that throughout the year, as the US Federal Reserve increased interest rates to a 22-year high, strong central bank buying combined with strong bar and coin demand supported gold prices amid rising bond yields and a strong US dollar. Over the past few quarters, the purchasing of physical gold by central banks has proven to be a significant driver of demand. According to him, China’s economic downturn increased demand for jewellery among its top consumer nation, while India’s consumption of jewellery was hindered by record high domestic prices and an uneven monsoon.Rao stated that Comex gold has encountered resistance in the USD 2,080-2,090 range once more in terms of price. He continued, “The current geopolitical environment, slowing global growth, and economic uncertainties further increase the appeal of the yellow metal, even though rates might stay higher for some time.” The chairman of the All India Gem and Jewellery Domestic Council (GJC), Saiyam Mehra, stated that despite 30-35 lakh weddings, sales were affected by the volatility of gold prices. However, he added that business will remain unchanged in 2022.“The weak rupee will further boost gold prices, which are likely to reach USD 2,250–2,300 and Rs 68,000–70,000 in 2024 due to the US Fed reducing rates and ongoing geopolitical tensions.” The business is probably going to stay at the same level as 2023, he said, and the high prices will have an even greater effect on sales in 2024. Gold prices reached record highs globally this year, according to Somasundaram PR, Regional CEO of the World Gold Council, as a result of several factors that highlighted the metal’s appeal as a safe haven and inflation hedge. Compared to last year, the price of gold was 12% lower in the September quarter. But, he added, the demand for gold in 2023 will be 700–750 tonnes, slightly less than in the previous year, even though gold investments will be worth more. He says that discussions about gold as a portfolio diversifier in these uncertain times have been reinforced and enhanced by the redemption of the first tranche of sovereign gold bonds in November at a CAGR (Compound Annual Growth Rate) exceeding 12 percent. “The trajectory of gold prices in 2024 will be largely dependent on the dollar index and geopolitical situation, aside from economic developments,” he stated. According to Vipul Shah, chairman of the Gem Jewellery Export Promotion Council (GJEPC), 2023 was a difficult year for exporters primarily because of China’s continued closure even after the Covid pandemic, geopolitical concerns, and a drop in demand in the major markets following an increase in interest costs. But things have started to get better, and in 2024 we anticipate that things will get better because interest rates will likely decline and we hope that geopolitical conflicts will be settled, which will stimulate the world economy. We anticipate the China market to reopen as well after a protracted period of closure,” he continued.
