Gold prices in India recovered mildly on Friday, November 15, with 22K, 24K, and 18K yellow metal witnessing their first surge in seven days. This gold price has taken a massive hit with 24K/100 grams of gold falling by Rs 37,100 in 4 days before Guru Nanak Jayanti. But if looked closely, gold prices have dipped by Rs 4,640 in 24K and by Rs 4,250 in 22K of 100 grams since Donald Trump won the US Presidential Election 2024. That being said, yellow metal has significantly corrected. Will wedding season make gold dearer or cheaper?
Gold Prices In India:
100 grams of 24K gold is at Rs 7,57,600, while 10 grams of the same carat is at Rs 75,760. Further, 22K gold is at Rs 6,94,500 in 100 grams, and at Rs 69,450 in 10 grams. Additionally, 18K gold is priced at Rs 5,68,200 in 100 grams and at Rs 56,820 in 10 grams.
Price of gold in Ahmedabad is at Rs 6,950 per gram for 22 karat gold and at Rs 7,581 per gram for 24 karat gold.
Gold Prices Fall Significantly Since Trump's Win:
On the day of the US Presidential election which was on November 5th, 24K and 22K of 10 grams of gold were at Rs 80,240 and Rs 73,500 respectively. Before this, on November 4th, 24K and 22K gold of 10 grams were at Rs 80,400 and Rs 73,700. Meaning, gold prices had started to take a U-turn from their record rally since the US election polling counts kickstarted.
The steepest fall of Rs 1,790 in 24K and Rs 1,650 in 22K of 10 grams was seen on November 7, after it was certain that Donald Trump was returning to White House. Since the election, gold prices have been volatile since it was evident that Trump was winning by a landslide.
The reason why gold lost its shine drastically is because the dollar strengthened robustly so much so that DXY touched its highest level in more than a year. Also, a spike in treasury yield, dulled demand for yellow metal.
That being said, 10 grams of 24K is down by 4,250 and lower by Rs 4,640 in 24K from November 4th to November 15th.
On Friday, November 15th, the dollar index stood around 106.8 level against a basket of currencies, moving towards recording its best week in over a month. The dollar is already above the 1-year high. As per Trading Economics, this is because investors dialled back expectations on Federal Reserve rate cuts.
Overnight, US Federal Reserve's chair Jerome Powell signalled that there was no hurry in cutting rates as strong US economic growth is going to allow FOMC to take its time in deciding how far and how fast key federal fund rates could be lowered.
In his speech to business leaders in Dallas, on Thursday, Powell said that the current state of the economy is not sending any signals that the US central bank needs to be in a hurry to lower rates.
After his speech, spot gold touched $2,560 levels, moving to log its worst week since June 2021, owing to a strong dollar and dimmed expectations of upcoming Fed rate cuts. In a month, spot gold has slipped by more than 4.2% as of now.
According to Trading Economics, Powell's comments align with colleagues advocating a cautious approach to future rate cuts. Consequently, markets lost confidence in a December rate cut, with traders now seeing a 58% chance, down from 80% before the speech. Additionally, investors believe that Trump's incoming administration could push for higher trade tariffs, tax cuts, and increased deficit spending, which may drive inflation higher, further limiting the Fed's ability to reduce borrowing costs.
Indian gold prices are likely to follow the trend, however, in between, the gems and jewellery market of the country will witness the hustle and bustle of wedding season. Could gold shine or fall further during the winter wedding season?
Gold Prices Outlook In Wedding Season?
Prithviraj Kothari, Managing Director of RiddiSiddhi Bullions Limited (RSBL) said, As India's 2024 wedding season approaches, gold prices are expected to be impacted by both local demand and global market dynamics. Traditionally, India's wedding season drives significant gold purchases, and with an estimated 48 lakh weddings from November to December, demand is forecasted to remain high, potentially keeping prices elevated.
However, he added, record-high prices in 2024 may temper demand, leading some consumers to seek smaller quantities or alternative investment forms. Discounts and jeweller incentives might help moderate prices, yet global factors like U.S. interest rates could keep prices volatile.
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