Gold prices soar 30% since last Dhanteras: Time to invest?
Gold prices have skyrocketed nearly 30% since the last Dhanteras, on November 10, 2023. The price per 10gm has jumped from ₹60,750 to around ₹80,000. This year alone, domestic gold prices have soared over 23%, beating equities' returns. The benchmark Sensex has clocked a gain of around 11% this year and over the last six months, it has gained over 8%.
Global uncertainties drive gold's steady increase
S Ravi, Founder of Ravi Rajan & Co, says the consistent increase in gold value over the last year can be attributed to global economic uncertainties, inflation pressures, and interest rate fluctuations. Ongoing conflicts like the Ukraine-Russia crisis and Israel-Hamas situation have prompted investors to flock to safe-haven assets like gold.
Festive season and cultural significance boost gold demand
The festive season, especially Dhanteras, usually witnesses a surge in gold purchases. Palka Arora Chopra, Director of Master Capital Services Ltd, says the increase in prices is in line with the usual increase in demand for gold during festive and wedding seasons. "Gold is frequently seen as a safe haven during difficult times, offering a hedge against inflation and market instability," she said.
Gold investment: A tradition and strategic move
Vikas Singh, Managing Director & CEO of MMTC-PAMP, stresses the importance of gold in Indian households. With Dhanteras around the corner, experts say this could be the right time for investors to look at gold. "Given the current global environment, it remains a good time to invest in gold," Santosh Joseph, CEO of Germinate Investor Services said while emphasizing gold's role as a hedge against macroeconomic risks.
Gold ETFs recommended for cost-effective investment
Sandip Raichura, CEO of Retail Broking and Distribution at PL Broking, observes a "bull flag pattern" in gold, suggesting it could go up further. Experts suggest gold ETFs or Fund of Funds as a cost-effective way to invest. They offer liquidity and easy access without the additional costs of physical gold, making them perfect for long-term investment strategies.
Gold investment forecast amid geopolitical uncertainty
Looking ahead, the combination of geopolitical uncertainty and potential softening of interest rates in the US creates a favorable environment for gold to appreciate further. Experts suggest that gold should ideally account for 5-10% of one's investment portfolio, to provide long-term financial security. Sugandha Sachdeva, Founder of SS WealthStreet, predicts, "Gold's momentum is expected to persist into the first half of 2025 with prices potentially reaching ₹84,000 per 10gm."
