Gold Prices Surge Over 30% to ₹78577: Will They Hit ₹80,000 Soon?

Gold prices have soared over 30% since Diwali 2023, reaching ₹78,577 per 10 grams, reflecting strong demand amid economic uncertainties. In 2024 alone, gold has outperformed equity markets, with expectations that prices could surpass ₹80,000 before the next Diwali. Experts recommend gold as a strategic portfolio allocation, anticipating further gains amid geopolitical tensions and potential Federal Reserve rate cuts.

CONTENTS:

• Gold rises amid U.S. uncertainties.
• Gold steadies, capped by strong USD.
• Gold dips as dollar strengthens; election looms.
• Gold may rally past $2,750; caution advised.
• USD strongest against AUD, mixed performance overall.
• Gold prices rise over 30% post-Diwali; demand strong.

Gold Prices Surge Over 30% to ₹78577: Will They Hit ₹80,000 Soon?

Gold rises amid U.S. uncertainties

Gold Prices Surge Over 30% to ₹78577 Gold prices climbed in Asian markets on Tuesday, nearing record highs amid pre-election uncertainties in the U.S. and anticipation of upcoming economic data. Recovering from losses in the prior session, gold was initially impacted by easing concerns over Middle East tensions. However, demand for the safe-haven asset remained strong, driven by expectations of a closely contested presidential race and key economic indicators that could influence interest rate outlooks.

Spot gold rose by 0.4% to $2,753.60 per ounce, while December gold futures increased 0.4% to $2,765.50 per ounce as of 00:39 ET (04:39 GMT).

Safe-haven appeal remained solid, particularly as Donald Trump and Kamala Harris entered a competitive race ahead of the November 5 election. Polls suggest a tightening race, fueling demand for stable assets like the dollar and gold due to political uncertainty.

Gold prices were also supported by anticipation of pivotal economic reports this week, which could impact the Federal Reserve’s interest rate decisions. Third-quarter GDP data is expected on Thursday, while the PCE price index (the Fed’s preferred inflation measure) and nonfarm payrolls are due on Friday. These reports come shortly before the Fed’s November meeting, where a rate cut of 25 basis points is anticipated. Precious metal prices have been resilient despite data that could slow down Fed rate cuts in the near term.

Other precious metals also saw gains, with platinum futures up 1% to $1,054.00 per ounce and silver futures increasing 0.2% to $34.07 per ounce.

In contrast, copper prices dipped as traders awaited further economic signals from China, the top global importer of the metal. Benchmark copper futures on the London Metal Exchange declined 0.5% to $9,510.00 per ton, while December copper futures dropped 0.7% to $4.3362 per pound. Copper prices remained under pressure in October, as recent stimulus from Beijing did little to bolster economic optimism. The focus now shifts to China’s upcoming purchasing managers index data on Thursday for further economic insights.

Gold steadies, capped by strong USD

Gold Prices Surge Over 30% to ₹78577 Gold prices (XAU/USD) maintained steady gains through Tuesday’s Asian session, trading above $2,750 and approaching last week’s record high. Ongoing safe-haven demand, fueled by Middle East tensions and uncertainty around the U.S. election, continued to support the precious metal. Additionally, a softer trend in U.S. Treasury yields combined with a cautious market sentiment provided an extra boost.

However, gains for gold remain capped by renewed buying interest in the U.S. Dollar (USD). Expectations of a less aggressive rate-cut path from the Federal Reserve (Fed) have bolstered the USD Index (DXY), which measures the dollar against a basket of other currencies, slowing its recent pullback from late-July highs. Furthermore, a prevailing risk-on sentiment may limit further bullish moves for XAU/USD as traders await key U.S. economic data later this week for insights into the Fed’s rate strategy.

Gold dips as dollar strengthens; election looms

Gold Prices Surge Over 30% to ₹78577 A pullback in U.S. Treasury yields triggered an intraday dip in the U.S. Dollar from its highest point since July 30, allowing gold prices to attract buyers around the $2,725 mark at the start of a potentially impactful week. Recent positive U.S. economic data has dampened expectations for another large rate cut from the Federal Reserve, likely sustaining U.S. bond yields amid concerns about deficit spending following the November 5 presidential election.

With the election on the horizon, Vice President Kamala Harris and Republican nominee Donald Trump remain locked in a tight race, adding uncertainty to the markets. Meanwhile, the U.S. warned Iran at the United Nations Security Council of serious consequences if it escalates actions against Israel, following Israeli strikes on military targets in Iran over the weekend.

In China, gold consumption dropped 11.18% year-over-year in the first three quarters of 2024, as high prices reduced demand for jewelry, according to the state-backed gold association.

Investors are now focused on Tuesday’s U.S. economic releases, including the Conference Board’s Consumer Confidence Index and the Job Openings and Labor Turnover Survey (JOLTS), for immediate trading insights. These reports, along with other key U.S. data expected this week, could shape expectations around the Fed’s interest rate path, impacting USD trends and potentially setting a new direction for XAU/USD.

Gold may rally past $2,750; caution advised

Gold Prices Surge Over 30% to ₹78577 From a technical standpoint, a firm break above the $2,750 supply area could signal a fresh rally for bullish traders. This could push gold prices beyond their all-time high of around $2,759 and test resistance along an ascending trendline established nearly four months ago, near the $2,770-$2,775 range. If momentum holds, prices might extend further toward the psychological $2,800 level.

However, with the Relative Strength Index (RSI) on the daily chart nearing overbought levels, caution may be warranted for bulls. A period of consolidation or a slight pullback could be advisable before any additional upward moves.

On the downside, any corrective pullback should find support around the recent swing low near $2,725, followed by support at $2,715. A decisive break below this range could trigger some technical selling, potentially pushing gold lower past the $2,700 level, with further support expected near $2,675 and down to the $2,657-$2,655 horizontal zone.

USD strongest against AUD, mixed performance overall

Gold Prices Surge Over 30% to ₹78577 The percentage change of the U.S. Dollar (USD) against major currencies today shows USD’s strongest performance against the Australian Dollar. The changes are measured by comparing the base currency in the left column with the quote currency across the top row.

For example:
– USD gained 0.29% against the Australian Dollar (AUD) and 0.16% against the New Zealand Dollar (NZD).
– USD saw smaller increases of 0.03% against the Euro (EUR) and 0.09% against the British Pound (GBP).
– USD depreciated by 0.21% against the Japanese Yen (JPY) and by 0.05% against the Swiss Franc (CHF).

This heat map highlights each currency’s performance relative to others.

Gold prices rise over 30% post-Diwali; demand strong

Gold Prices Surge Over 30% to ₹78577 Gold prices have surged from Rs 60,282 per 10 grams to Rs 78,577 per 10 grams since Diwali 2023, marking an impressive increase of over 30%, according to the Indian Bullion and Jewellers Association (IBJA). This rise highlights the value many Indians place on gold, both culturally and as a generational investment asset.

In 2024 alone, domestic gold prices have increased by more than 23%, outperforming the equity markets. The Sensex has gained around 11% this year, with a notable 8% rise in the past six months, whereas the Nifty 50 index grew by over 28% since last year, slightly trailing gold’s appreciation.

Despite record-high prices, demand for gold remains strong, with expectations that prices will surpass Rs 80,000 per 10 grams before Diwali. In light of global economic and geopolitical uncertainties, gold is considered a safe haven and an effective hedge against inflation. The DSP Mutual Fund’s October 2024 Netra Report supports gold’s role as a risk-management tool, particularly in emerging markets where currency depreciation often boosts gold prices.

Gold is also recommended as a strategic allocation of 10-12% in diversified portfolios, providing stability and growth potential. Options like gold ETFs, sovereign gold bonds, and physical gold allow investors to diversify based on goals and liquidity needs. Santosh Joseph, CEO of Germinate Investor Services, underscores the favorable conditions for investing in gold, while FinEdge Co-founder Harsh Gahlaut suggests Dhanteras as an ideal time to buy gold in either physical or electronic forms.

According to Malabar Group Chairman MP Ahammed, the current gold rally is likely to continue, driven by uncertainty surrounding the U.S. Presidential election and potential rate cuts by the Federal Reserve. In the longer term, with a 30% surge in value over the past year, experts predict that gold prices could reach around Rs 1,03,000 per 10 grams by Diwali 2025. As of October 23, 2024, IBJA reported 24-karat gold at Rs 78,703 per 10 grams and 22-karat gold at Rs 72,092 per 10 grams.