One of the pleasant surprises that Finance minister Nirmala Sitharaman sprang on the middle-class consumers of India during her budget speech on July 23, 2024 was announcing that she was reducing the import duty on gold from 15% to 9%. It applied brakes on the ballooning prices of gold (22 carat) that rose above Rs 74,000 in mid-June and dipped to the level of Rs 66,000 in August.
However, experts indicate that the price of the yellow metal is going to rise in the October-December period of this year. There are quite a few reasons that might again drive the growth in prices of the precious metal.
Festive and marriage engine
The biggest reason to drive the growth in prices is the impending festive season when gold consumption peaks around Diwali and Dhanteras. Gold is considered auspicious in India and Indians buy gold during the festive period every year. Dhanteras is the time when the sale peaks. This year Diwali will be observed on October 31-November 1 and Dhanteras will take place on October 29. The pull of consumption raises the price of the metal. Another big demand generator will be the marriage season which peaks in December-January. Jewellery for this season will be purchased in the months prior to this time.
US presidential election
An apprehension of recession is gnawing the US economy and Federal Reserve might urgently snip the interest rates by 50 basis points. This in itself can boost the prices of gold. “There will be uncertainty in the US because of the presidential election in early November this year. The US central bank Federal Reserve can also cut interest rates in September,” Joydeep Sircar, director, B Sirkar Johuree, a brand in Kolkata that is more than 100 years old told News9live.
Persistent tension in two regions
The military confrontation between Russia and Ukraine and that between Israel and Hamas show no sign of ending. Both have triggered uncertainty in the financial markets and continue to do so. The price of gold can also get a boost from this bout of uncertainty. All over the world, gold is a favourite investment avenue during times of war and uncertainty.
Rising gold prices had a brief interlude following the Budget when import duties were slashed from 15% to 6%. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
