Rising geopolitical tensions throughout the world drove India’s gold prices to rise during the 2023–2024 fiscal year. The yellow metal was very volatile, mostly due to slower development in developed nations and the monetary tightening measures taken by central banks throughout the world in reaction to higher than average inflation.
By the conclusion of FY24, the price of MCX gold had increased by more than 12%, from about ₹59,400 per 10 grams at the beginning of the year to over ₹67,000 per 10 grams. Global conflicts such as the ongoing Russia-Ukraine war and the Israel-Hamas conflict characterized this fiscal quarter.
“Gold prices have moved steadily higher over the last six months as expectations of a dovish Fed policy have been gaining ground. The fall in interest rates is a positive for gold prices. The gold prices breaking key long term resistance levels indicate there may be strong momentum which may continue over the near to medium term, some profit may not be ruled out though. The key monitorable remains the expectations building around the timing of Fed rate cut,” stated Joseph Thomas, Head of Research at Emkay Wealth Management.
“In light of the recent surge in gold prices, we’ve observed a remarkable trend in customer sentiment and behaviour. Positive feedback from customers pleased with their timely purchases as prices continue to rise, coupled with upcoming festivals like Holi, Gudi Padwa and Akshay Tritya, the demand is expected to further drive business. Anticipation is high for the upcoming wedding season in the following quarter, which is poised to amplify this positive sentiment,” mentioned Saurabh Gadgil, Managing Director and CEO at PNG Jewellers.
“In India, this may initially impact customer buying patterns, yet optimism is prevalent as Akshay Tritiya is around the corner, where we anticipate a surge in gold jewelry purchases. Despite potential volume effects due to budgetary considerations among Indian customers, historical trends suggest a positive outlook for gold sales,” added Mitesh Khimji, Director at Khimji Jewellers.
Way forward
“Looking ahead, we anticipate a robust quarter, with expectations of a 10% growth over the previous quarter. Despite the upcoming elections, the prevailing positive sentiment and growing consumption in India bode well for sustained gold demand, fostering optimism about future sales and a prosperous season for both customers and the industry at large,” Gadgil continued.
“Demand is unlikely to see a notable uptick in the next couple of months, even should prices moderate, as the country’s impending general elections (April to June), will see the movement of gold and cash closely monitored. Data shows that gold consumption fallen during three of the last four general election periods. Some improvement in demand could be expected around the time of Akshaya Tritiya (10 May), as this is traditionally considered to be an auspicious time to buy gold,” wrapped up Kavita Chacko, Research Head at India World Gold Council.
