Gold prices recorded third consecutive monthly gains, although, the upside momentum had slowed down in May 2024. But in the long term, gold has risen significantly, making investors rich. 10 grams of 24K has skyrocketed by more than Rs 46,774 or 182% in 10 years of the Modi regime. The outlook of gold is also robust post-2024 Lok Sabha Election, where the consensus expectation is of a majority win by the PM Modi-led government.
Gold Prices:
At present, 24K gold is available at Rs 72,550 in 10 grams, while, 22K of the same gram is at Rs 66,500, and 18k of 10 grams is at Rs 54,410. The cheapest gold to buy is 1 gram which is at Rs 6,650 in 22K, Rs 7,255 in 24K, and Rs 5,441 in 18K.
In May, gold prices bolstered to hit a new lifetime high of Rs 74,201 per 10 grams before correcting. Overall, last month, gold prices surged nearly 2%, slower gains compared to a 5% upside in April and 8.4% gains in March 2024.
Gold has held its robust upside despite volatility, after starting 2024 with a decline of 1% each in January and February.
The latest Lok Sabha Election 2024 coupled with early rate cut expectations, geopolitical uncertainties and macroeconomic data have influenced sentiment in yellow metal since March.
Gold Prices Performance In 10 Years Of Modi-reign:
The 2024 election kick started on April 19, 2024, and concluded on June 1, 2024. The outcomes will be announced on June 4, 2024.
10 years ago, in June 2014, the lowest gold price was Rs 25,776 which was on June 5, 2014.
Time skip to now, gold prices have skyrocketed by Rs 46,774 from the current price level. This would be 181.5% returns in investors' portfolios in the long term.
Gold Prices Outlook For June 3-7:
As per Equichain Wealth Advisors, this week, "we will focus on Gold and silver in the commodity segment which currently trading near its recent lifetime high. As we start the new month the focus will again shift to jobs data in the U.S. which is released in the first week of every month. U.S. market continues to focus around interest rate and reacting to data on the probability of a rate cut by September 2024 or earlier or later during 2024."
Further, the brokerage pointed out that any concern about the economy, geo-political tension or global central banks' shift from reserve currency to gold are some of the key positive triggers for gold prices.
Accordingly, Equichain's weekly outlook note said, "When we combine the global factors, we do believe that is giving mixed signals. We would be focusing on the equity market which is trading at a fresh high and gold and silver which are also trading at lifetime highs. We see this as early signs of market factoring in lower interest rate, economic growth and geo-political tension could also get eased out."
Post Election Outlook:
Brokerage Motilal Oswal has continued to be positive on gold and has further raised gold's potential upward target price to Rs 81,000 in 24K of 10 grams in the domestic market. Motilal recommends a BUY-On-Dips opportunity in gold and advises accumulating this pristine metal near Rs 69,000. On COMEX, Motilal advises accumulating around $2250 for targets towards $2650.
According to Motilal, Gold started the year steadily, but bullish momentum has picked up significantly, posting gains of around 14% year-to-date in the domestic market. The report also highlights the astounding growth registered by Silver this year, having already gained upward mobility of 27% returns year-to-date in 2024.
Navneet Damani, Group Senior VP - Commodity Research at Motilal Oswal Financial Services said, "Geopolitical tensions have added to the risk premium for gold as concerns about debt pose long-term challenges to overall growth. The economic indicators from the US continue to show strength in the economy."
Damani added, "Additionally, along with central bank buying, festive and wedding-related domestic demand could boost sentiment. It says that although ETF buying is struggling, investment and central bank buying are maintaining strong demand momentum."
On Fed rate cuts, Motilal said, "Market participants are closely watching the US central bank for hints regarding potential interest rate cuts, which has been keeping them on edge. Despite expectations for rate cuts earlier in the year, hawkish comments from Fed officials have tempered those beliefs, leading to a reduction in anticipated rate cuts from over four to approximately two for the year 2024."
However, the brokerage also believes that the probability of a Fed rate cut has shifted gradually from March through May and June, and now to September 2024.
Disclaimer: The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.
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