In recent trading, the price of gold has experienced a slight decline, dropping ₹154 to settle at ₹90,721 per 10 grams. This downturn is attributed to weaker demand in the spot market. On the Multi Commodity Exchange (MCX), June gold contracts fell 0.17%, with a trading volume of 18,583 lots. Just a day earlier, gold prices had peaked at an impressive ₹91,400 per 10 grams, marking a record high due to strong global trends.
Global Economic Influences on Gold Prices
The current surge in gold prices on the international market has seen values surpass $3,100 per ounce. This increase is largely driven by investor anxiety surrounding U.S. tariffs and the potential economic repercussions, prompting many to seek safety in gold.
- Market Volatility: Ongoing uncertainty about U.S. tariff announcements, labeled as "Liberation Day" by President Trump, is keeping investors on edge.
- Job Market Concerns: Recent disappointing data regarding U.S. job growth and manufacturing highlights worries among Federal Reserve officials about the stability of employment.
As investors await crucial labor reports, including the ADP employment report and the non-farm payrolls data scheduled for Friday, the dollar index remains steady around 104. Manav Modi, a Senior Analyst from Motilal Oswal Financial Services, remarked on the cautious market sentiment leading up to these announcements.
Future Projections for Gold Prices
Looking ahead, experts have differing opinions on the trajectory of gold prices. Currently trading close to ₹91,100, predictions suggest that gold could potentially reach ₹1 lakh by 2025. Achieving this milestone would require a further increase of about 10% from the present levels.
- Sriram Iyer, Senior Analyst at Reliance Securities, noted that a weaker rupee could significantly impact gold prices, making a move towards ₹1 lakh plausible. However, he cautioned that a return to economic stability and tighter monetary policies could slow down gold’s ascent.
Conversely, Chintan Mehta, CEO of Abans Financial Services, believes that the current rally is more an extension of previous trends rather than the onset of a new upward trajectory. He expressed skepticism about reaching ₹1 lakh by 2025, suggesting that most bullish factors have already been priced in.
Investing in Gold: Timing Is Everything
Gold’s performance in the early months of 2025 has been remarkable, yielding over 18.64% returns in the first quarter alone, the highest since Q3 1986. For the fiscal year 2024-25, returns have soared to 39.73%.
- Expert Advice: Rahul Kalantri, VP of Commodities at Mehta Equities, indicated that while further gains of 10-12% are possible, it’s wise for investors to approach the market cautiously. He recommends refraining from new investments at current levels and suggests that short-term investors might consider taking profits.
As the gold market continues to evolve amidst global economic uncertainties, prospective investors should carefully evaluate their strategies to avoid potential risks. With the market poised for significant changes, now may not be the ideal time for new entries.
