Gold prices have been experiencing significant fluctuations in recent days, both globally and in India. According to latest reports, gold prices are projected to reach new heights by the end of 2024, driven by strong investment demand, a weakening US dollar, and growing geopolitical concerns.
Global Outlook
A recent report suggests that gold prices could reach $2,750 per ounce by the end of 2024, up from an earlier target of $2,600. This upward revision is supported by gold's impressive 29% rise this year. The metal is expected to continue its rally, with predictions of it reaching $2,850 per ounce by mid-2025 and $2,900 by the third quarter of 2025.
The rally in gold prices has been fueled by declining US real interest rates, central bank purchases, and a seasonal recovery in jewelry demand. Gold hit an all-time high of $2,670 per ounce on September 24, driven by concerns over global economic growth and the approaching US elections.
Indian Market
In India, gold prices have seen a slight dip on September 30. The price for 24-carat gold stood at 77,240 per 10 grams in Mumbai, while 22-carat gold was priced at 70,800 per 10 grams. These prices reflect a correction from the record highs seen in the previous days.
In Delhi, 24K and 22K gold prices eased by 10 to 77,540 per 10 grams and 71,090 per 10 grams, respectively. Silver prices also declined by 100 per kg to 94,900 in the national capital, following weak global cues.
The retail gold prices in India are influenced by various factors, including economic conditions, geopolitical events, and supply and demand. Gold is deeply embedded in Indian culture and acts as a key investment and a significant component in traditional weddings and festivals.
Factors Influencing Gold Prices
Gold prices are inversely correlated with the US dollar and US Treasuries. When the US dollar depreciates, gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Geopolitical instability and fears of a deep recession can also drive gold prices up due to its safe-haven status.
Central banks have been significant players in the gold market, with many increasing their gold reserves to support their currencies and improve economic stability. In 2022, central banks added 1,136 tonnes of gold worth around $70 billion to their reserves, the highest yearly purchase on record.
