The increasing geopolitical tensions around the globe drove India’s gold prices during the fiscal year 2023–2024. The yellow metal saw significant volatility, which was mostly brought on by developed countries’ slower rates of development and global central banks’ implementation of monetary tightening policies in response to above-average inflation rates.
From about ₹59,400 per 10 grams at the beginning of the year to over ₹67,000 per 10 grams at the conclusion, the price of MCX gold increased by more than 12 percent in FY24. Numerous international crises, including the ongoing conflict between Russia and Ukraine and Israel and Hamas, characterised this fiscal year.
“Over the past six months, gold prices have been steadily increasing due to the growing expectation of a dovish Fed policy. The falling interest rates are positively affecting gold prices. The recent breakthrough of key long-term resistance levels suggests strong momentum, which may continue in the near to medium term. However, some profit-taking may occur. The timing of the Fed rate cut remains the main factor to monitor,” stated Joseph Thomas, Head of Research at Emkay Wealth Management.
India is among the largest gold markets, as stated by the World Gold Council (WGC). The demand for gold is increasing due to growing affluence. Gold plays a crucial role in the cultural fabric of the country, as it is considered a symbol of both value and prestige and plays an important part in various ceremonies. In rural communities, gold is viewed as a sound investment due to its portability and security, as well as its strong connection to the culture.
Jewellers are expecting strong growth in the upcoming quarter compared to previous ones. “We anticipate a robust quarter ahead, with expectations of a 10% growth over the previous quarter. Despite the upcoming elections, the prevailing positive sentiment and growing consumption in India bode well for sustained gold demand. This fosters optimism about future sales and a prosperous season for both customers and the industry at large,” said Gadgil.
