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Diwali

Gold Prices Scale New Highs Ahead of Diwali Festivities

Strategic Insights

— 2 min read

As the countdown to Diwali and Dhanteras begins, gold prices have been scaling new highs, with the price of 24-carat gold hovering close to the Rs 80,000/10 gm mark. The demand for gold, both as an investment and for gifting purposes, is expected to increase during the festive season. The ongoing geopolitical tensions and the downward trajectory of the interest rate cycle are also contributing to the upward momentum of gold prices. Gold has seen a 64% jump in prices over the past two years, from Rs 47,843 per 10 grams in October 2022 to the current rate of Rs 78,030 per 10 grams.

Key Takeaways:

  • Gold prices have seen a 37% jump in the last one year from last October levels.
  • The ongoing escalation of conflict in the Middle East continues to act as a strong support for gold, as investors seek safe-haven assets amid rising geopolitical risks.
  • Major central banks' consistent support for gold buying adds to its bullish outlook in the current risk-averse environment.
  • Gold has solid support between Rs 77,000-77,250/10 gm in MCX, providing a floor for any short-term pullbacks.
  • On the upside, resistance is seen in the range of Rs 78,550-78,775/10 gm, indicating the next potential targets for further gains.
  • Analysts expect gold's upward momentum to persist, with any price dips being used as potential buying opportunities.
  • The yellow metal is trading better in times of downswings in the economy, making it an attractive investment option.
  • Gold's relative value improves in times of inflation, shielding its investors from the potential devaluation of the portfolio.
  • The ongoing downward trajectory in the interest rate cycle and broader global economic uncertainty have further bolstered the uptrend in gold prices.
  • Jateen Trivedi, VP Research Analyst -- Commodity and Currency, LKP Securities, notes that gold has solid support and potential targets for further gains.
  • Praveen Singh -- Associate VP, Fundamental Currencies and Commodities, Sharekhan by BNP Paribas, adds that the metal continues to rise on healthy ETF inflows, geopolitical risks, and uncertainties over the US Presidential election.

Statistics:

  • Gold prices have risen by 2.43% in the last ten days.
  • Gold prices have risen by 2.33% in the last one week.
  • The gold MCX futures contracts with the expiry of December 2024 were quoted for Rs 78,030 per 10 gm, an increase of Rs 281.
  • The futures contracts for silver with the December 2024 expiry on MCX futures were trading at Rs 97,360 per kg, gain of Rs 1958.
  • Gold prices have seen a 64% jump in prices over the past two years, from Rs 47,843 per 10 grams in October 2022 to the current rate of Rs 78,030 per 10 grams.
  • The price of 24-carat gold is hovering close to the Rs 80,000/10 gm mark.

Sources:

  • Jateen Trivedi, VP Research Analyst -- Commodity and Currency, LKP Securities
  • Praveen Singh -- Associate VP, Fundamental Currencies and Commodities, Sharekhan by BNP Paribas
  • Contify.com
  • IE Online Media Services Pvt. Ltd.
  • MCX Futures

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