By Dr. Renisha Chainani, Head- Research, Augmont – Gold for all
Amid geopolitical tensions, election anxiety, and the global monetary easing route to be pursued by central banks, gold struck yet another new record price in terms of all major currencies, reaching a fresh all-time high for the 34th time in 2024 thus far.
Rising for the 23rd week in a row so far in 2024, the price of gold in US dollars has surpassed $2747 (~Rs 78200), up more than 3% from the previous week. While Silver gained 10% in only one week, reaching a high of about $34.32 (~Rs 98220).
The European Central Bank (ECB) declared last Thursday that, in line with expectations, it had cut key rates by 25 basis points after the October policy meeting. ECB reaffirmed in its policy statement that it would continue to base its decision about the proper degree and duration of policy restriction on data and meeting-by-meeting considerations. The precious metals pack has become more appealing as a safe haven due to the global monetary easing cycle.
In Q2/2024, India’s central bank boosted its accumulation pace, while China’s notably slowed it down. India’s gold reserves rose by 18.7 tonnes in Q2 2024, just less than Poland’s growth. India’s purchases in Q1/2024 were just slightly lower. Thus, in just six months, the Reserve Bank of India was able to raise its gold holdings by 4.6%.
With barely two weeks remaining until the U.S. election on November 5, certain financial instruments are beginning to increase their bets on Donald Trump winning. The immigration, tariff, and tax policies of the Republican candidate are viewed as inflationary, which is good news for the currency and bad news for bonds. Given his aggressive trade policies and desire to weaponize the dollar, gold has been one of Trump’s most obvious trades to date, supporting the demand for diversification among developing central banks.
It seems that gold still has steam left to rise towards $2800 (~Rs 80000) in the next 15 days due to safe-haven buying amid geopolitical uncertainty, US election jitters in the first week of November and festive buying ahead of Dhanteras and Diwali in India. In case, Gold stages for a technical correction, could be seen as the first support level of $2717 (~Rs 77400) followed by $2670 (~Rs 76000).
Gold Weekly Chart
Silver prices are sustaining above $33 (~Rs 95000), and it is likely to touch the next psychological target of $35 (~Rs 100,000) very soon, before heading for a correction.
Silver Weekly Chart
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