Gold rush: Investments doubled in just 5 years
A study by Motilal Oswal Financial Services Ltd (MOFSL) has revealed that gold investments made during Diwali in 2019, have yielded returns exceeding 103% as of today. As Dhanteras approaches, MOFSL's outlook on both gold and silver remains optimistic with projections for further growth in both precious metals. The firm also expects silver to outperform gold over the next year due to strong industrial demand.
MOFSL sets ambitious targets for silver
MOFSL has set an ambitious target for silver, expecting it to hit ₹1.25 lakh per kg on Multi Commodity Exchange (MCX), and $40 per ounce on COMEX by end-2025. Silver has already shown heavy growth, rising over 40% year-to-date and recently crossing ₹1 lakh domestically. For gold, MOFSL has set targets at ₹81,000/10gm in the medium term and ₹86,000 per 10gm in the long term.
Gold's historical performance during Diwali
Gold has always done well during the Diwali season, thanks to the surge in demand. According to MOFSL, the pre-Diwali period has witnessed positive returns for gold, with only two cases (2015 and 2016) of losses in the past decade. This further highlights gold's status as a safe bet, especially during uncertain times.
Factors influencing precious metals market in 2024
The precious metals market in 2024 has been largely driven by two key factors: rate-cut expectations by the Federal Reserve and rising geopolitical tensions, particularly in the Middle East. The recent 50 basis point rate cut by the Fed is part of an effort to spur economic growth, amid slowing inflation and mixed labor market signals. MOFSL analyst Manav Modi said, "This year's rally in precious metals is driven largely by market uncertainties and a depreciating rupee."
