Diwali To Diwali: Returns To Expect From Gold In Samvat 2081

The festive season, often considered an auspicious time to buy gold by many. Especially in India, investors have also considered gold a safe-haven investment. Rising from the notion that the value of gold will hold it value. While gold has been an asset that Indians have held for generations, gold as an asset has seen fluctuations in price this year.

With various international and domestic cues that drove the trajectory of demand, gold prices saw a few slips amid the steady climb. The domestic price of gold was recorded at Rs 60,980 as of Nov. 1 2023. The prices have climbed to Rs 78,670 as of Nov. 1 2024.

The price of gold has appreciated by 28.80% according the India Bullion Association. The appreciation that the commodity is higher than the appreciation that equities have reported.

The commodity saw the lowest prices last year on Oct. 5 with prices slipping to Rs 56,650. The highest prices that were reported last year was on Dec. 26 when domestic gold prices recorded at Rs 63,200.

During 2024, with multiple international cues like fed rate cut and brewing geo-political tensions, the prices saw some fluctuation. The lowest prices reported this year was triggered by the customs duty rate cut. The rate was reduced from 15% to 6% and the domestic gold prices slipped to Rs 67,800 on Jul. 25.

The record high prices reported by the commodity was Rs 81,500 on Oct.23 ahead of the festive demand. While the domestic cues were the driving factor for the steady climb in prices, international triggers continue to make the commodity a safe-haven investment.

The significantly higher performance when compared to equities have been driven by the international tension while the domestic demand also has specific events and cues pushing the price. The outlook on the commodity to be held as an asset also seem positive according to this expert.

"When the rally is there, it goes to three to four and this rally started in 2020," said Ajay Kedia, director of Kedia Capital. The commodity has a significant appreciation percentage against equities this year.

"Market has already factored in the rally and geo-political tensions are also discounted for," said Kedia. The commodity to expected to continue to hold its place as a safe haven investment as rate cuts from global banks are anticipated.

"Two digit returns next year is expected for 2025 as well. We expect international prices to hit the 3,000 dollar mark and the lowest price could be 2,400 dollars," he said.

The dollar index might also react to nearing political cues in the US like the elections as well. He also notes the steady climb that silver has also seen this year along with the yellow metal.