Experts Say Gold Price May Touch 2 lakhs in 2024: Know Reason Why?

Gold prices in India have been on a tear lately, recently surpassing ₹74,000 per 10 grams. This upward trajectory has investors wondering: could gold prices reach the much-discussed ₹2 lakh mark? While the future remains uncertain, financial experts offer their insights on what might drive gold prices in the coming months and years.

Factors Influencing Gold Prices:

Several factors influence the price of gold. Here are some key considerations:

Economic Uncertainty: Geopolitical tensions and global economic instability often drive investors towards safe-haven assets like gold. When stock markets become volatile, gold is perceived as a reliable store of value.

Interest Rates: Rising interest rates can make gold less attractive compared to interest-bearing investments. However, if interest rate hikes are coupled with economic slowdown, investors might still favor gold as a hedge.

The Dollar: Gold is typically priced in US dollars. A weaker dollar can make gold more affordable for international buyers, potentially pushing prices up.

Supply and Demand: Fluctuations in gold production and physical demand from key markets like India and China can also influence prices.

Expert Opinions:

The World Bank's latest forecast predicts an average gold price of $1,950 per ounce in 2024, which translates to roughly ₹70,000 per 10 grams. This suggests that a significant jump to ₹2 lakh might be unlikely in the near future.

However, some analysts believe that gold prices could experience a boost in the short term. Anuj Gupta, Chief of Commodity and Currency at HDFC Securities, predicts prices to potentially touch ₹2,350 per ounce (around ₹78,000 per 10 grams) by September 2024 if the US Federal Reserve initiates a rate cut regime.

Long-Term Investment Strategy:

While gold can be a valuable addition to a diversified portfolio, it's crucial to consider your investment goals and risk tolerance. Gold prices are known for their fluctuations, and significant returns might not materialize overnight.

Looking Beyond Gold:

Investing in other asset classes like stocks, bonds, or real estate can offer diversification and potentially higher returns. Consulting with a financial advisor can help you create a personalized investment strategy tailored to your needs.

The Diwali Factor:

The upcoming Diwali festival in India is traditionally a time of high gold demand, which could lead to a temporary price rise. However, this is usually followed by a correction post-festival.

The future trajectory of gold prices remains uncertain. While reaching ₹2 lakh per 10 grams in the near future might be an optimistic prediction, gold's role as a safe-haven asset remains relevant.

By understanding the factors influencing gold prices and conducting thorough research, investors can make informed decisions about incorporating gold into their investment portfolio. Remember, diversification is key, and gold should be considered as part of a well-rounded investment strategy.