The Year 2024: A Golden Year for Gold
Gold Shines Bright
The year 2024 is closing out with Gold shining bright, clocking nearly 27% returns for the year, higher than the Nifty 50 or S&P 500 index, as geopolitical turmoil propped up the safe haven appeal of bullion.
Strongest Year Since 2010
This has been the strongest year for gold since 2010, and the outlook remains bullish for the precious metal. A similar rally could occur in 2025, but this will largely hinge on geopolitical developments.
Factors Driving Gold Prices
Three key factors have been at play in helping gold prices touch record highs this year. The escalating geopolitical risks in the middle-east, central banks buying gold, and rate cuts by the US Federal Reserve have all contributed to the rise in gold prices.
Forecasts for 2025
Forecasts on the precious metals are extremely bullish for 2025, with UBS seeing gold reach $2,900/oz by the end of the year. Citi, Goldman Sachs, and JPMorgan are targeting $3,000 by December 2025.
Challenges Ahead
While a more dovish Fed will be beneficial for gold, a prolonged pause or policy reversal could put pressure on investment demand. The precious metal may also face competition from equities and real estate in Asia during 2025.
Impact on India
Demand for gold in India seems to be more stable going into 2025, as it is less likely to be impacted by a tariff war that President-elect Trump is threatening with. Economic growth remains above 6.5%, and any tariff increase will affect it less than other US trading partners.
Trade Deficit Concerns
India’s trade deficit in November rose to $37.8 billion, mainly due to a four-fold rise in inbound shipments of gold. The Commerce Ministry and the Central Board of Indirect Taxes and Customs are looking into this data, and a formal clarification on the matter could be expected soon.
Stay tuned for more updates and insights on the stock market! For more insights on investing in the Indian stock market, check out resources like Moneycontrol and NSE India.
Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.