Gold outshines Nifty with 13% gains in H1 2024
In the first half of 2024, gold outshone the Nifty 50 index with a return of 13.37% compared to Nifty's yield of 10.5%. The MCX gold contract saw an increase of nearly ₹8,400 per 10gm while the Sensex rose by 2,279 points as of June 30. Aamar Deo Singh, Senior Vice President-Equity, Commodity & Currency at Angel One, described the first half of 2024 as eventful and marked by significant volatility.
Factors influencing Nifty and gold performance
The Nifty's performance was shaped by various factors including Lok Sabha election results, global cues, domestic macroeconomic indicators, Middle East tensions, and diminishing hopes of multiple rate cuts by the US Federal Bank in 2024. Ajit Mishra, Senior Vice President-Research at Religare Broking, labeled Nifty's performance as "remarkably strong and exceeding expectations." Meanwhile, gold's gains were linked to Middle East tensions, Chinese gold rush and anticipated Fed rate cuts.
Historical performance of gold and Nifty
A comparison of the H1 performance of gold and Nifty over the past five years reveals a slight edge for gold. Between 2019 and 2023, gold yielded positive returns four times with the highest in 2020 (13.71%) and lowest in 2022 (0.59%). On the other hand, Nifty delivered positive returns thrice during H1 of 2019, 2021, and 2023 with its peak return in 2022 exceeding 12%.
Market predictions for H2 2024
Looking forward to the second half of 2024, Prithviraj Kothari, Managing Director of RiddiSiddhi Bullions Limited (RSBL) and IBJA National Chief, anticipates gold to reach ₹70,000 in the next 1-2 months due to weak fundamentals and technicals. However, he maintains a positive long-term view for gold. On the other hand, Mishra remains optimistic about Nifty and expects it to hit a level of 25,600 by year-end with growth driven by consumer spending and economic recovery.
