Gold prices expected to surge to Rs 70,000 in 2024 amid stable Rupee and global uncertainties

As 2024 unfolds, gold continues to be a shining star in the market, with experts predicting a surge in prices to reach Rs 70,000 per 10 grams in the domestic market. Several factors contribute to this optimistic outlook, including a stable rupee, geopolitical uncertainties, and a slowdown in global economic growth.

Currently, the price of gold stands at Rs 63,060 per 10 grams on the Multi Commodity Exchange (MCX) and approximately $2,058 per ounce in the international market. These figures come at a time when the rupee is trading above 83 against the US Dollar.

In early December, gold prices experienced a notable uptick, driven by global tensions in the Middle East. Market participants also speculated that the rate hike cycle had more or less concluded.

While the gold market witnessed volatility throughout the year, it achieved new highs of Rs 61,845 per 10 grams on May 4 in the domestic market and $2,083 per ounce in global markets. Subsequently, on November 16, the precious metal touched a record high of Rs 61,914 per 10 grams, as highlighted by Gnanasekar Thiagarajan, the Director of Commtrendz Research.

Reflecting its safe-haven appeal, gold reached an all-time high of Rs 64,063 per 10 grams and $2,140 per ounce on December 4.

Gnanasekar Thiagarajan anticipates further growth, predicting a rise to $2,400 in 2024. He suggests that if the rupee remains stable, gold is likely to reach around Rs 70,000. The upcoming elections in India could potentially weaken the rupee as Foreign Institutional Investors (FIIs) are expected to adjust their portfolios, providing additional support to domestic gold prices.

Ravindra Rao, Vice President - Head Commodity Research at Kotak Securities, notes that higher domestic prices may pose challenges for retail jewelry buying in India and China. However, he highlights the possibility of increased demand from central banks, surpassing last year's record, if the current momentum persists.

Central bank buying has played a significant role in supporting gold prices amid surging bond yields and a strong US Dollar. Rao emphasises that the geopolitical environment, slowing global growth, and economic uncertainties further enhance the appeal of gold.

Saiyam Mehra, Chairman of the All India Gem and Jewellery Domestic Council (GJC), acknowledges the impact of gold price volatility on sales. He predicts that gold prices could touch $2,250-2,300 and Rs 68,000-70,000 in 2024, with potential repercussions on sales.

Somasundaram PR, Regional CEO of the World Gold Council, underscores the role of gold as a safe haven and hedge against inflation. He highlights that the trajectory of gold prices in 2024 will depend on economic developments, the Dollar index, and the geopolitical situation.

Vipul Shah, Chairman of the Gem Jewellery Export Promotion Council (GJEPC), reflects on the challenges faced by exporters in 2023. Despite the tough year, he anticipates improvements in 2024, with expectations of lower interest rates, resolution of geopolitical issues, and the potential opening of the China market.

(With PTI inputs.)