Gold witnessed a decent rally since the 2024

Resilient physical gold demand played a major role in rally 

At the juncture of festive season, Colin Shah, MD, Kama Jewelry share Gold Outlook for the remainder of 2024! He said, Gold witnessed a decent rally since the beginning of this calendar year. The price of yellow metal witnessed an upside in the domestic market especially after the outbreak of the geo-political tensions in the Middle East, triggering volatility in prices around the mid-year.  

However, the prices saw some correction soon after the announcement of the customs duty cut in the union budget wherein the prices saw a drop of ~5% and the momentum soon gathered pace after this upside where prices hovered near a new all-time high range.   

The factors that played a major role in this rally is strong official sector buying coupled with resilient physical demand which provided structural support that lifted gold’s trading range and also has the potential to continue till the rest of the year. 

Another factor is Fed’s previous rate cut cycles, which gave a support to gold prices wherein it gained as much as ~9% over 2-3 quarters after the first cut. Moreover, strengthening of USD further provided a boost to gold prices. Going forward, the global price and demand of the yellow metal heavily relies on the next move by Fed.  

Overall, the outlook for gold looks extremely promising. Apart from the geopolitical risks, this could be driven by the higher macro volatility amid elections in many countries in 2024, especially the US, which will further support diversification and add to the yellow metal’s long term appeal.  

Also, with the reduced customs duty era, the festive and wedding season in the domestic market, along with increasing purchasing power of buyers due to higher disposable income will play its part in driving the demand for gold. Overall, we expect the remainder of the year to be stellar for gold rally, especially the Dhanteras period where gold may touch a new high.”

In the row, Chief Business Officer, PL Wealth Management, Shashank Pal said, currently, gold prices are approximately 72,000 for 24 karat. I anticipate that fluctuations over the next two weeks will remain within a range of half a percent to 1 percent. 

The trend is expected to be on the higher side, with gold prices likely to increase significantly over the next three months, potentially by at least a couple of percentage points.  

In contrast, silver is projected to experience sharper and quicker growth and consolidation. I foresee a higher percentage gain for silver, likely exceeding a couple of percentage points in the next three months, with consolidation of at least half a percent in the upcoming fortnight. These movements are influenced by global geopolitical conditions, domestic supply and demand, and fluctuations in the dollar-rupee exchange rate. Typically, during the festive season, there is an increase in demand for gold and gold jewelry, which is matched by higher supply from jewelers and bullion traders. Consequently, significant unwinding by bullion traders is expected, providing jewelers with the leverage needed to meet consumer demand effectively."