“The gold market has shown resilience in 2024, marked by significant growth volatility Fueled by geopolitical tensions, economic uncertainties and shifting monetary policies, the year started with a strong rally that propelled gold to record highs due to the rise of safe-haven assets. demand“Motilal Oswal said in his report.
The rally was also fuelled by ongoing conflicts, particularly in Ukraine and the Middle East, which have continued to make investors wary of global stability. These geopolitical risks have traditionally supported gold prices, and the persistent nature of these tensions suggests that gold’s role as a safe haven will remain crucial in the near future.
There are also presidential elections coming up in the United States this year and the uncertainty related to them could cause volatility in gold, the local brokerage firm said.
“Central bank Gold purchases slowed in the second quarter, falling 39% quarter-on-quarter to 183 tonnes. Despite this decline, purchases remained robust, exceeding the five-year quarterly average of 179 tonnes and continuing the long-term positive demand trend. Expectations of a more accommodative environment monetary policy This could further increase the attractiveness of gold. Gold’s future outlook is also supported by central bank purchases, particularly in emerging countries. markets “They are looking to diversify their reserves,” said Navneet Damani, senior vice president of the commodities research group at Motilal Oswal Financial Services.Read also: Gold prices on track for monthly gains; focus on US dataDamani further says domestic demand in key markets such as India has remained strong, aided by reduced import tariffs and favourable economic policies, which continue to boost gold demand fundamentals. interest rate Expectations of cuts, geopolitical tensions and black swan events could provide further impetus to prices. Negative influences such as a 9% cut in India’s gold import tariffs, the unwinding of yen carry trades and speculative profit-taking have contributed to price pressures this year. Market dynamics remain complex, with gold’s performance closely tied to fluctuations in the dollar index, US Treasury bond yields and global monetary policies.
According to MOFSL, central banks have played a key role in shaping gold prices through their monetary policy actions, particularly in response to changing economic conditions.
Gold futures for October were trading flat, down Rs 118 at Rs 72,070/10 gram on MCX around 5 pm on Friday.
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