Gold and silver prices are rising due to strong demand, and this momentum is expected to continue throughout the festival season.
In͏͏ the͏͏ current͏͏ financial͏͏ year,͏͏ gold͏͏ prices͏͏ have͏͏ increased͏͏ by͏͏ nearly͏͏ 10͏͏ percent,͏͏ while͏͏ silver͏͏ prices͏͏ have͏͏ risen͏͏ by͏͏ approximately͏͏ 24͏͏ percent.
“From͏͏ an͏͏ Indian͏͏ perspective,͏͏ the͏͏ customs͏͏ duty͏͏ cut͏͏ in͏͏ July͏͏ has͏͏ significantly͏͏ boosted͏͏ gold͏͏ consumption͏͏ and͏͏ will͏͏ continue͏͏ to͏͏ do͏͏ so.͏͏ We͏͏ anticipate͏͏ a͏͏ strong͏͏ performance͏͏ in͏͏ the͏͏ October-December͏͏ quarter.͏͏ It’s͏͏ an͏͏ opportune͏͏ time͏͏ for͏͏ gold,”͏͏ said͏͏ Sachin͏͏ Jain,͏͏ Regional͏͏ CEO,͏͏ India,͏͏ World͏͏ Gold͏͏ Council,͏͏ in͏͏ a͏͏ phone͏͏ interview.
Ajay͏͏ Kedia,͏͏ head͏͏ of͏͏ Mumbai-based͏͏ Kedia͏͏ Advisory,͏͏ expects͏͏ gold͏͏ futures͏͏ prices͏͏ to͏͏ rise͏͏ to͏͏ INR͏͏ 77,000͏͏ in͏͏ the͏͏ near͏͏ term.
Gold Nears͏͏ All-Time͏͏ Highs:
Gold͏͏ prices͏͏ are͏͏ currently͏͏ approximately͏͏ INR͏͏ 75,000͏͏ per͏͏ 10͏͏ grams,͏͏ slightly͏͏ below͏͏ the͏͏ all-time͏͏ high͏͏ of͏͏ around͏͏ INR͏͏ 75,400.͏͏ At͏͏ the͏͏ beginning͏͏ of͏͏ the͏͏ financial͏͏ year,͏͏ prices͏͏ were͏͏ around͏͏ INR͏͏ 68,700.
“For͏͏ a͏͏ rally͏͏ to͏͏ occur,͏͏ a͏͏ price͏͏ correction͏͏ is͏͏ necessary,͏͏ and͏͏ we’re͏͏ currently͏͏ witnessing͏͏ that.͏͏ Factors͏͏ such͏͏ as͏͏ ETF͏͏ purchases,͏͏ central͏͏ bank͏͏ buying,͏͏ and͏͏ geopolitical͏͏ tensions͏͏ all͏͏ support͏͏ a͏͏ bullish͏͏ outlook͏͏ for͏͏ gold,”͏͏ said͏͏ Ajay͏͏ Kedia.
Continue͏͏ Exploring:͏͏ Gold jewellery͏͏ demand͏͏ set͏͏ to͏͏ rise͏͏ with͏͏ 18%͏͏ volume͏͏ growth͏͏ anticipated,͏͏ says͏͏ Nuvama͏͏ Report
Silver Prices͏͏ to͏͏ Reach͏͏ INR͏͏ 100,000:
Kedia͏͏ predicts͏͏ that͏͏ silver͏͏ prices͏͏ will͏͏ reach͏͏ INR͏͏ 100,000͏͏ per͏͏ kg͏͏ in͏͏ the͏͏ near͏͏ to͏͏ mid-term.
“Industrial͏͏ demand͏͏ for͏͏ silver͏͏ is͏͏ rising,͏͏ particularly͏͏ for͏͏ electric͏͏ vehicles͏͏ and͏͏ solar͏͏ panels.͏͏ Although͏͏ silver͏͏ prices͏͏ struggled͏͏ to͏͏ gain͏͏ traction͏͏ due͏͏ to͏͏ recession͏͏ fears͏͏ in͏͏ some͏͏ countries,͏͏ we͏͏ have͏͏ seen͏͏ significant͏͏ outperformance͏͏ in͏͏ silver͏͏ over͏͏ the͏͏ past͏͏ few͏͏ months,”͏͏ Kedia͏͏ stated.
Silver͏͏ prices͏͏ are͏͏ currently͏͏ approximately͏͏ INR͏͏ 93,000͏͏ per͏͏ kg,͏͏ compared͏͏ to͏͏ INR͏͏ 75,000͏͏ at͏͏ the͏͏ beginning͏͏ of͏͏ the͏͏ current͏͏ financial͏͏ year.
Manoj͏͏ Kumar͏͏ Jain,͏͏ Director͏͏ and͏͏ Head͏͏ of͏͏ Commodity͏͏ and͏͏ Currency͏͏ Research͏͏ at͏͏ Prithvi͏͏ Finmart,͏͏ expects͏͏ gold͏͏ futures͏͏ to͏͏ reach͏͏ INR͏͏ 77,000͏͏ and͏͏ silver͏͏ to͏͏ hit͏͏ INR͏͏ 96,000͏͏ in͏͏ the͏͏ near͏͏ term.
“The͏͏ usual͏͏ market͏͏ fundamentals͏͏ are͏͏ not͏͏ in͏͏ play,͏͏ and͏͏ the͏͏ current͏͏ bull͏͏ run͏͏ is͏͏ driven͏͏ by͏͏ post-Covid͏͏ gold͏͏ purchases͏͏ by͏͏ central͏͏ banks͏͏ as͏͏ part͏͏ of͏͏ de-dollarisation,͏͏ along͏͏ with͏͏ increased͏͏ geopolitical͏͏ tensions͏͏ and͏͏ rate͏͏ cuts͏͏ by͏͏ various͏͏ central͏͏ banks.͏͏ Lower͏͏ interest͏͏ rates͏͏ are͏͏ also͏͏ beneficial͏͏ for͏͏ gold͏͏ and͏͏ other͏͏ commodities,”͏͏ Jain͏͏ stated.
International͏͏ gold͏͏ prices͏͏ have͏͏ experienced͏͏ an͏͏ “extraordinary”͏͏ increase͏͏ of͏͏ approximately͏͏ 40͏͏ percent͏͏ this͏͏ year,͏͏ compared͏͏ to͏͏ the͏͏ usual͏͏ average͏͏ of͏͏ around͏͏ 10͏͏ percent,͏͏ Jain͏͏ noted.
Colin͏͏ Shah,͏͏ MD͏͏ of͏͏ Kama͏͏ Jewelry͏͏ and͏͏ former͏͏ Vice͏͏ Chairman͏͏ of͏͏ the͏͏ Gem͏͏ and͏͏ Jewellery͏͏ Export͏͏ Promotion͏͏ Council͏͏ (GJEPC),͏͏ stated͏͏ that͏͏ gold͏͏ demand͏͏ is͏͏ anticipated͏͏ to͏͏ remain͏͏ strong͏͏ with͏͏ the͏͏ arrival͏͏ of͏͏ the͏͏ festive͏͏ season.
“The͏͏ primary͏͏ factors͏͏ contributing͏͏ to͏͏ gold’s͏͏ outstanding͏͏ performance͏͏ are͏͏ the͏͏ onset͏͏ of͏͏ a͏͏ rate͏͏ cut͏͏ cycle͏͏ in͏͏ the͏͏ US͏͏ and͏͏ the͏͏ strong͏͏ expectations͏͏ for͏͏ additional͏͏ rate͏͏ cuts͏͏ in͏͏ the͏͏ upcoming͏͏ meetings.͏͏ Geopolitical͏͏ tensions͏͏ between͏͏ Israel͏͏ and͏͏ Lebanon͏͏ are͏͏ also͏͏ driving͏͏ gold͏͏ prices͏͏ higher,”͏͏ Shah͏͏ said.
International͏͏ gold͏͏ prices͏͏ are͏͏ currently͏͏ approaching͏͏ USD͏͏ 2,700͏͏ per͏͏ ounce,͏͏ and͏͏ Shah͏͏ anticipates͏͏ they͏͏ may͏͏ reach͏͏ USD͏͏ 3,000.͏͏ In͏͏ the͏͏ domestic͏͏ market,͏͏ he͏͏ expects͏͏ prices͏͏ to͏͏ surpass͏͏ INR͏͏ 78,000͏͏ in͏͏ the͏͏ medium͏͏ to͏͏ long͏͏ term.
Pranav͏͏ Mer,͏͏ Vice͏͏ President͏͏ of͏͏ Commodity͏͏ and͏͏ Currency͏͏ Research͏͏ at͏͏ JM͏͏ Financial͏͏ Services͏͏ Ltd,͏͏ echoed͏͏ this͏͏ sentiment.͏͏ He͏͏ stated͏͏ that͏͏ bullion͏͏ is͏͏ expected͏͏ to͏͏ remain͏͏ bolstered͏͏ by͏͏ safe-haven͏͏ demand͏͏ and͏͏ purchases͏͏ from͏͏ ETF͏͏ investors.
“On͏͏ the͏͏ chart,͏͏ the͏͏ trend͏͏ remains͏͏ positive͏͏ as͏͏ long͏͏ as͏͏ support͏͏ at͏͏ 75,850/75,500͏͏ holds,͏͏ while͏͏ resistance͏͏ is͏͏ noted͏͏ at͏͏ 76,550͏͏ for͏͏ December͏͏ futures,”͏͏ Mer͏͏ added.
