Gold Prices Reach New Highs
Gold prices have reached a new all-time high of Rs 78,450 per 10 grams, according to a report by Motilal Oswal, a wealth management firm. The report suggests that prices may consolidate near these highs, with a potential correction of 5-7% expected. Historically, gold has not seen gains of 32% in any year since 2000.
Factors Influencing Gold Prices
The upcoming US presidential election could influence market dynamics. Domestic exchange-traded funds (ETFs), imports, SPDR Holdings, and CFTC positions are currently supporting bullish trends. The report highlights that the US Federal Reserve’s policies and geopolitical factors have contributed to the global rise in gold prices over the past nine months.
Future Predictions
Motilal Oswal predicts that gold prices could reach Rs 86,000 per 10 grams over the next two years. The demand is expected to remain strong, especially during the festive season, driven by central bank purchases and domestic demand related to festivals and weddings.
Rural Demand and Economic Conditions
Rural demand for gold is showing signs of recovery, supported by a good monsoon season and increased crop sowing. This is expected to boost gold purchases during the festive period. The Indian gold market has seen robust demand, particularly after the import duty cut and changes to long-term capital gains tax for gold ETFs announced in the Union Budget.
Doubts Revealed
Motilal Oswal -: Motilal Oswal is a financial services company in India. They provide advice and predictions about investments, like gold prices.
ETFs -: ETFs stand for Exchange Traded Funds. They are like baskets of investments that people can buy and sell on the stock market, similar to shares.
Geopolitical influences -: Geopolitical influences refer to how events in different countries, like conflicts or political changes, can affect things like gold prices.
Central bank purchases -: Central banks are like big banks for countries. When they buy gold, it can increase demand and affect gold prices.
Import duty cuts -: Import duty cuts mean the government has reduced the taxes on goods brought into the country, like gold. This can make gold cheaper to buy.