Gold Price Outlook September 2024: Four Reason Why Continue To Invest In Gold; Latest Prices In Major Cities

Gold prices have continued to show resilience in 2024 so far, emerging among the best-performing assets as well. In INR terms, MCX gold has surged by 14% compared to NSE government securities composite and EM index that gained by 7-9%. In August month however, gold and silver prices dipped by 1% and 11%, however, ensured to stay near its all-time high levels. Nonetheless, Axis Securities recommended NEUTRAL on gold and the bullion continues to its preferred asset class in 2024 so far.

In its latest note, Axis Securities said, gold emerged as one of the best-performing asset classes for 2024, with prices rising by 14% in INR terms till the end of May'24. In the last three months, prices were largely flat vs. the positive momentum seen in the earlier months. This strong rally pushed gold prices above $2425/oz for the first time in recent months. The positive momentum in gold prices was driven by expectations of a rate-cut cycle, increasing geopolitical tensions, central bank purchases, and rising volatility in the equity markets. In the recent budget announcement, the customs duty on the import of Gold has been reduced to 6% from 15% earlier; this has led to price cuts in the domestic market. This development led Gold prices to decline by 4% in INR terms in Jul'24 but increase by 5% in USD terms.

However, in Aug'24, Gold prices went up by 4% in INR terms and by 2% in USD terms, the brokerage added.

Going ahead, the brokerage believes that Gold will continue to have an edge over other asset classes in 2024. It will be seen as a tool to facilitate the flight to safety as the risk of a slowdown in the US market will continue to support the gold prices. Fundamentally, the price of Gold is inversely related to bond yields, and any weakening in yields will continue to have a positive impact on the price of Gold.

It added, "Given current macroeconomic developments, Gold will remain a preferred asset class until uncertainties surrounding the Russia-Ukraine and Middle East crisis subside and will continue to attract investment as a proven hedge against other asset classes. Gold prices will continue to find support from prevailing geopolitical risks as well as concerns over growth and inflation pressures in the global environment. We maintain our neutral stance on Gold and recommend a 'Buy on Dips' strategy."

Moreover, Axis Securities listed out four key reasons to why invest in gold. These are:

- Low yield: Low yields are the driving force for the Gold rally. With central banks at the peak of the rate hike cycle, Gold will continue to attract investments in the near future.

- Slowdown risk mounts over the US market and Gold will continue to look attractive as a hedging instrument to balance the risk.

- Gold is the best anti-inflation asset.

- Gold provides 'flight for safety' given the recent geopolitical conflict.

MCX Gold, Silver Prices On September 10:

MCX gold futures with December expiry is trading up by Rs 56 to Rs 71,684 per 10 grams. The bullion is ranging from Rs 71,695 to Rs 71,580.

While MCX silver futures with December expiry is trading higher by Rs 186 or 0.22% to Rs 83,831 per 1 kg. The precious metal is ranging from Rs 83,854 to Rs 83,451.