DHANTERAS 2024 

Gold is a popular investment choice for investors during Dhanteras and Diwali, demonstrating its cultural significance and long-term value for many.

Here's a list of 7 key factors that are likely to influence gold prices in the near term:

Ongoing geopolitical tensions pose a significant risk to global financial stability.  The Israel-Hamas conflict has heightened regional instability, disrupted global supply chains, and fueled inflationary pressures. This is expected to drive bullion demand.

Indian Rupee has recently crossed the 84 mark against the U.S. dollar, hitting a record low. Also, the RBI is anticipated to permit further rupee depreciation in light of record-high gold prices and a strong U.S. dollar, which could further elevate gold prices.

Safe-haven demand for gold remains robust amid ongoing economic uncertainty and the underperformance of domestic assets. World Gold Council data shows that global official reserves increased by 290 metric tons in the first quarter of the year.

In September 2024, the Federal Reserve lowered its key interest rate by 50 basis points, marking its first rate cut since 2020, as U.S. inflation showed signs of easing. Inflation still hovers above the Federal Reserve's 2 per cent target, reinforcing demand for gold in global markets as bullion acts as hedge against inflation.

Global investment demand has been a key driver of rising gold prices throughout 2024. In the second quarter, demand for gold bars, coins, and gold ETFs held steady year-on-year at 254 tonnes. 

Physical gold demand has risen sharply in 2024, driven primarily by Over-the-Counter (OTC) investments and increased central bank acquisitions. It reached 1,258 tonnes in the second quarter—the highest second-quarter level since 2000.

The decline in the dollar index has boosted the gold prices to record highs. Central bank rate cuts, like the Federal Reserve’s, typically support gold by reducing holding costs.