Gold Price Jumps In 2024, Should You Invest In 2025? Know What Experts Said
In the domestic market, gold price saw a dip of 3% from October's peak on the back of global trends. However, for the year, gold will log one of its best results.
Influenced by both global cues and domestic demand, gold price in India during 2024 has seen a steady upward climb even as it was affected by short-term volatility on certain occasions.
The lowest that the yellow metal's price has gone down to in this period was Rs 61,590, according to the India Bullion Association. And understandably, the highest level was hit on Oct. 30 when prices hit Rs 82,400, according to the India Bullion Association. The price was pushed up due to the festive demand.
The notable periods when the price was under pressure was ahead of the US elections. Ultimately, the results had a direct impact on investor behaviour causing bullion to trend lower since Donald Trump emerged victorious in the US election. However, the gains logged by gold in 2024 still outstrip most other commodities.
The precious metal's price has seen a slight dip, but it has held steady ahead of the New Year. In fact, gold price as on 31 Dec. stood at Rs 76,480, according to the India Bullion Association as of 6:40 a.m.
Glimmering 2024 For Gold
The commodity, despite short-term volatility saw consistent demand, specifically safe-haven and festive purchases. Gold’s strong gains this year — which have seen the metal set a succession of records — may signal a possible shift in the market’s dynamics given that this has happened despite a stronger US dollar and rising real Treasury yields, both typically headwinds, according to Bloomberg.
“The robust investment in gold in the month of December 2024 depicts that gold continues to hold a higher preference in the buyers investment portfolio. This is supported by the growing inflows in Indian gold ETFs which added 14.5 trillion year-to-date," revealed Colin Shah, managing director of Kama Jewelry.
However, he also noted that gold price fluctuations have acted as a deterrent to jewellery demand, keeping the buyers sitting on the fence. In the domestic market, gold price saw a dip of 3% from October's peak on the back of global trends. This slip was also contributed to by the slump in demand post the festive period.
The commodity has fluctuated between Rs 73,477 and Rs 78,669 since late October and by mid-December the price has reached the Rs 77,185-mark.
"Nevertheless, the long term appeal of the yellow metal as a safe-haven and preferred investment asset class along with positive outlook on prices boosted the sales of gold bars and coins, indicating steady growth for physical investment demand," Shah said.
Global Cues And Currency
Taking a wider the view, there were several global cues and events that directly impacted both demand and price of the commodity.
"The US 10-year treasury rates rose to 4.641% last week, hitting the highest level since May, adding to the dollar's strength. Amidst mixed US jobless data and pressure from rising US dollar and Treasury yields, gold declined in subdued holiday trade," revealed Anuj Gupta, head of commodities and currency, HDFC Securities. The dollar index extending its winning streak to the fourth week in a row, further dampened the demand for gold.
The local currency played its role too. "The Indian rupee's weakness boosted local gold prices. The Indian rupee fell to an all-time low of Rs 85.82 per US dollar, weighed down by continuously high dollar demand. The currency registered its worst week since March in December," said Gupta.
Will Gold Shine In 2025?
How will things pan out for gold in 2025? As can be seen, even though investors often resort to buying the commodity as a safe haven investment, the precious metal has given decent gains in 2024.
In fact, gold price is heading for one of its biggest annual gains this century, with a 27% advance. This rising trajectory has been boosted by US monetary easing, sustained geopolitical risks, and a wave of purchases by central banks, according to Bloomberg.
And things likely to continue. "Moving ahead, this investment demand is expected to remain strong. However, due to the impending inauspicious period for gold purchases, the demand for jewellery may witness short-term pressure," said Shah.
Shah also added that with the current price dynamics, his long-term view of gold remains positive. In fact, he indicated it may even touch levels of $3,000, but it may well be marked by bouts of volatility and price correction.
The positive outlook on gold is also shared by Gupta who has recommended a 10-15% allocation for investors in their portfolio. He also revealed the strategy that investors may consider.
"We believe that investors should stay long in gold and use corrections as a good buying opportunity. For Investors, we recommend taking a long position in gold futures around 74,000 to 74,500, with an upside target of 79,900 to 82,000, and maintaining a stop loss below 70,000," said Gupta.
Gupta also shared insights on buying and holding trends. He said that long-term inventors preferred gold bonds and physical gold, while short-term investors and swing traders preferred gold ETFs. The short-term investors have taken this route in an attempt to capture short-term technical opportunities.
