The price of gold grabbed headlines for much of 2024, when its price zoomed due to a few factors. After global political uncertainties ebbed a bit after the US presidential election on November 5, 2024, when Republican candidate Donald Trump was elected the US president, gold prices receded from its peak levels.
The other factors that contributed to the decline in gold prices were the strengthening of the US dollar and decreased demand for gold as a safe haven asset as economic conditions improved a bit. Demand for gold also went down as demand from China ebbed. Usually, when economy recovers, investors tend to shift investments from non-yielding assets such as gold towards instruments that offer higher yields.
China increasing reserves
According to IBJA data, the price of gold (10 grams) stood at the following levels in the past 5 days: Rs 77,908 (Jan 10), Rs 77,579 (Jan 9), Rs 77,410 (Jan 8), 77,196 (Jan 7), Rs 76,948 (Jan 6). Bullion traders told the media that one of the key reasons for the rise in the price of the yellow metal was the news that People’s Bank of China increased its gold reserves for the second consecutive month. In 2024, the Chinese central bank emerged as one of the top buyers of gold in the world and was seen responsible for pushing up prices for a considerable period of time, though it stopped buying after its own actions put the prices in dizzying heights.
Outlook on gold in 2025
According to expert agencies, Gold prices are expected to scale new heights in 2025. For example, ICICI Securities has said that gold prices could rise to Rs 85,000 per 10 grams. This broking major also mentioned that the factors to contribute to it could be renewed buying interest by central banks, robust demand from the industrial sector and concerns of trade war between the US and China. ETF flows are also expected to increase this year. Monetary easing by a few major central banks of the world can also be a factor. Globally, gold prices can move in the $2,900-3,000 band.
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Gold prices have against started moving north quietly. It has risen from Rs 76,948 per 10 gms on January 6 to Rs 77,908 on January 10, according to data from IBJA (India Bullion and Jewellers Association). Gold prices provided returns of about 25% in 2024. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
