Predicting the outlook for gold prices is always challenging, considering the influence of multiple factors that can trigger unpredictable shifts. However, as we approach Diwali 2024, which is towards the end of the year, expert analysis and market trends suggest that gold prices show promising prospects.
The US Dollar’s strength can also influence gold prices, with a stronger dollar typically leading to a drop in gold prices and vice versa.
Hence, the dollar’s performance in 2024 could have a significant impact.
Anuj Gupta, Chief of Commodity and Currency at HDFC Securities, said, “Bullish momentum will continue in gold until Diwali festival. Comex gold can rally towards $2250 and $2320 until it holds above the $2145 level. Gold June futures have immediate resistance at 68300, then 69070 acts as the next resistance, and it has support at 66780/66300. The Comex silver trend is moderately bullish, with a strong supply zone of $25.80-$26.25 and a demand zone of 23.80 to $23.50. MCX silver March future has resistance at 77300/78000 and support at 74400/73500.”
One of the primary factors impacting gold’s outlook is the global economic scenario. The pandemic caused havoc on the global economy and led to a surge in gold prices in 2020 and 2021 due to its safe-haven appeal.
However, as economies start to recover, gold prices may stabilise but maintain an upward trend due to restructuring economies and probable inflation.
Ravindra Rao, Head of Commodity Research, Kotak Securities, said, “The trajectory of Fed policy will significantly impact gold prices in 2024. Currently, the market anticipates a 54% probability of a quarter-point rate cut by June (according to the CME Fedwatch tool), potentially extending to July should inflationary pressures persist, notably from US shelter inflation and rising gasoline prices.
Nonetheless, gold prices appear promising over a six-month horizon amidst expectations of a Fed pivot in the second half of 2024, heightened geopolitical tensions, global growth anxieties, and China’s economic struggles.”
“On the price action front, COMEX Gold prices seem poised to maintain levels above the $2150 mark, the previous all-time high. Such sustainability would empower bulls to potentially drive prices towards $2250-$2300 per troy ounce, corresponding to Rs 68000/10 grams in the MCX (based on the prevailing USD-INR rate),” said Rao.
Recent trends and historical performance suggest that gold prices generally rise around the festive season, especially Diwali, which is considered an auspicious time to buy gold in India. This surge in demand could potentially push prices upward in 2024.
Adding to this is the monetary policy of central banks worldwide. Any probable quantitative easing measures or interest rate changes can cause a shift in gold prices. If the global interest rates are low, then gold becomes a better investment, considering it is a non-interest-bearing asset.
Amit Goel, Co-Founder and Chief Global Strategist at Pace 360, said, “The stage is set for a multi-year bull run, and we anticipate gold reaching levels of $2400-2500 by year-end. Global macro-fundamental factors strongly support the potential of this asset class, signalling a potential takeoff soon. It’s a compelling time to consider getting on board and holding tight.”
To sum up, the outlook for gold by Diwali 2024 is poised for an upward trend, backed by the global economic scenario post-COVID-19, historic Diwali trends, central banks’ monetary policies, the performance of the US Dollar, and geopolitical conditions. However, predicting the exact prices would need constant attention to these ever-changing factors. Investors are therefore advised to monitor the market trends closely and to make informed decisions.