Gold Shines with 20% Surge Amid Global Uncertainties in 2024

In 2024, gold prices rose by an impressive 20.3%, solidifying the metal's safe-haven investment reputation amid global uncertainties. Despite price corrections, factors like geopolitical risks and inflation drove the demand for gold, offsetting the influence of a stronger dollar and subdued holiday market activity.

Gold prices saw an impressive increase of 20.3% throughout 2024, reinforcing the metal's status as a safe-haven investment amidst ongoing global uncertainties. Starting the year at Rs 65,220 per 10 grams for 24-carat gold and ending at Rs 78,440, the precious metal demonstrated significant upward momentum even with intermittent corrections.

The rally in gold prices was marked by notable milestones, such as the price peak of Rs 76,410 per 10 grams on July 18, followed by another surge to Rs 81,740 on October 31. The ascent was driven by global inflation fears, currency fluctuations, and a trend of de-dollarization. Factors like geopolitical uncertainties, inflationary pressures, and inconsistent exchange rates fueled this sharp rise.

Dr. Saurabh Gadgil of PNG Jewellers observed that while easing geopolitical tensions temporarily reduced the 'war premium' on gold, persistent inflation concerns and shifts in financial trends maintain its appeal as a safe investment. Despite some corrections, the fundamentals remain strong, with potential for strategic buying during dips. As the year concludes, gold enters a consolidation phase, influenced by a robust U.S. dollar and holiday market quietness.

According to Pranav Mer from JM Financial Services Ltd., gold prices are likely to experience continued consolidation amid the lack of new triggers, with the higher dollar trading near 108-levels, further limiting upside potential. Key data points, such as regional manufacturing PMIs, are in focus, with momentum remaining sideways.

While short-term fluctuations persist, the long-term outlook for gold remains favorable as 2024 wraps up, with analysts predicting continued growth into 2025. Gold's strong performance throughout the year reaffirms its role as a stable asset for investors in an unpredictable global economy.

(With inputs from agencies.)