Gold prices have been hitting record highs due to various factors such as geopolitical conflicts in West Asia, buying by central banks, and physical demand. The India Bullion and Jewellers Association reported that gold traded at an all-time high at Rs 74,222 per 10 grams for the fine gold quality. Analysts predict that gold prices are expected to remain volatile, ranging between Rs 71,000 and Rs 75,000 in the near term.
At the global level, gold prices have also been on the rise, reaching all-time peaks. However, prices have slightly declined recently after economic data suggested that the US Federal Reserve may cut interest rates later this year. Gold future contracts have seen a slight decrease, but prices remain over 15% higher this year.
Global gold demand has increased by 3% year-on-year in the first quarter of 2024, with healthy investment, central bank buying, and higher demand from Asian buyers contributing to the rise. Central banks continue to increase their gold holdings, adding 290 tonnes during the quarter. Gold is often seen as a safe haven asset during times of uncertainty, and 2024 is expected to see strong returns for gold.
Analysts predict that gold prices may face resistance at current levels, but the likelihood of significant corrections is low due to strong central bank and retail demand. The World Gold Council anticipates a much stronger return for gold in 2024 than originally expected. This outlook is driven by factors such as central bank buying and the historical resilience of gold as an asset during turbulent times.
Overall, gold prices have been on the rise due to geopolitical tensions, central bank buying, and increasing demand from various sectors. While there may be some volatility in the short term, analysts remain optimistic about the future performance of gold as an investment. Investors looking for a safe haven asset during times of uncertainty may find gold to be an attractive option for their portfolios.
