Continuing to glitter in 2024 as well, gold price is likely to touch Rs 70,000 per 10 grams in the domestic market on the back of a stable rupee, geopolitical uncertainties and slowing global economic growth, according to experts.
Price Trends and Record Highs
Currently, the yellow metal price is hovering at Rs 63,060 per 10 grams on the commodity stock exchange MCX and around USD 2,058 an ounce in the international market at a time when the rupee is trading above 83 against the US dollar.
In early December, prices skyrocketed again on global tensions in the Middle East, and emerging market participants anticipated that the rate hike cycle has more or less ended.
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As per PTI's report, the gold price remained volatile this year, it reached a new high of Rs 61,845 per 10 grams on May 4 in the domestic market and USD 2,083 an ounce in the global markets. Later, the yellow metal touched a record high of Rs 61,914 per 10 grams on November 16.
In a reflection of its safe-haven appeal, gold touched an all-time high of Rs 64,063 per 10 grams and USD 2,140 an ounce on December 4.
"We expect an eventual rise to USD 2,400 in 2024, and if the rupee is to be stable, gold is likely to reach around Rs 70,000 levels. As India faces elections, the rupee could weaken as Foreign Institutional Investors (FIIs) are expected to lighten up their portfolios, which could further bolster domestic prices for gold, Commtrendz Research Director Gnanasekar Thiagarajan told PTI.
Kotak Securities Vice President - Head Commodity Research Ravindra Rao said retail jewellery buying might face headwinds from higher domestic prices in India and China while central banks' demand might exceed last year's record if the current momentum continues.
Rao noted that robust central bank buying alongside solid bar and coin demand helped gold prices amid surging bond yields and a strong US dollar throughout the year, as the US Federal Reserve raised the interest rates to a 22-year high.
"The central banks' buying has turned out to be a major demand driver for physical gold since the last few quarters. Record high domestic prices and uneven monsoon weighed on Indian jewellery consumption while the Chinese economic downturn led to an increase in the jewellery demand from the top consumer nation," he said.
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On the price front, Rao said Comex gold has once again taken resistance near USD 2,080-2,090.
Even though rates might stay higher for some time, the current geopolitical environment, slowing global growth, and economic uncertainties further increase the appeal of the yellow metal, he added.
Factors Affecting Demand
All India Gem and Jewellery Domestic Council (GJC) Chairman Saiyam Mehra said the volatility in gold prices impacted sales, and in spite of 30-35 lakh weddings, the business will be the same as in 2022.
"With the US Fed reducing rates, and continuing geopolitical tensions, the weak rupee will further boost gold prices, which is likely to touch USD 2,250-2,300 and Rs 68,000-70,000 in 2024. The high prices will impact sales further in 2024, and the business is likely to remain at the same level as 2023," he said.
Outlook and Influencing Factors
Gem Jewellery Export Promotion Council (GJEPC) Chairman Vipul Shah said 2023 was a tough year for the exporters, mainly due to a decline in demand in the key markets following a rise in interest cost, geopolitical issues and China continuing to remain closed even after Covid.
"However, the situation has started to improve, and we expect things to improve in 2024, as interest rates are expected to come down, and we hope geopolitical issues will be resolved, boosting the global economy. We also expect the China market to open after remaining closed for a long period," he added.
