Gold prices in India increased marginally on the festival day of Dhanteras, in which buying gold and other ornaments is considered auspicious for a good future. With this, the yellow metal slightly gained during the early trades at home.
Gold Prices Spike on Dhanteras as Capital Drops Briefly;
December gold futures traded on the Multi Commodity Exchange (MCX) at around 10:11 am today were up 0.31% to rise by Rs 244, trading at Rs 78,810 per 10 grams. December silver futures too traded higher by 0.33%, or Rs 320, to stand at Rs 97,744 per kilogram.
Spot gold, however had dropped by an eighth of a percentage in the last two days and was trading down at Rs 78,510 per 10 grams in major cities. In the national capital on Monday, gold’s price fell by Rs 400 to Rs 81,100 per 10 grams for 99.9% purity.
Gold had hit record peaks seen over the weekend as 99.9% purity reached an all-time high of Rs 81,500 per 10 grams on Saturday. It attained Rs 81,100 for 99.5% purity levels. Purities today dipped by Rs 400 on Monday with the finest gold of 99.5% purity dipping to Rs 80,700 for 10 grams.
Strong gold performance over the year amidst global uncertainty
Gold has surged sharply in 2024 so far, reacting to sustained inflation, geopolitical uncertainty, and the volatile dollar. This precious metal has given a scintillating 24% return on domestic exchanges, thus making it an attractive investment. The current prices are nearing a key resistance point of Rs 79,800 per 10 grams or USD 2,800 per ounce, which analysts feel may mark a near-term peak.
“Gold has been one of the best-performing assets this year,” says market analyst Sameer Singh. “The combination of high inflation, a weakening rupee, and global demand has pushed prices to unprecedented levels in India. Dhanteras brings heightened demand, adding momentum for domestic prices to reflect the international uptrend,” he added.
Analysts Signal Possible Pullback Before Further Rally
Despite the festive bump, technical indicators suggest that gold is overbought, indicating a short-term correction may be in the offing. “Current prices are close to resistance, and with the market overbought, we could see a pullback,” Singh said. A short correction would take prices down to Rs 76,700 per 10 grams (USD 2,675 per ounce), allowing the market to consolidate before any further upward movement.
For traders, an opportunity to buy could arise at around Rs 76,500 for 10 grams. “This could be an entry point,” Singh said. “From here, we are looking at a target range of Rs 83,000 per 10 grams, with the potential to hit Rs 86,000 if market conditions continue to be favorable.”
A fall below Rs 72,300 per 10 grams could be a bearish signal. It goes down to the extent of Rs 70,000 per 10 grams, which shows that the market is actually getting into a negative trend at such levels.
Dhanteras Demand Drives Precious Metal Prices
Traditionally, Dhanteras is the first day of Diwali festival and mostly is the time of much business regarding gold along with other precious metals. Buying gold is done on the first day to mark some kind of cultural prosperity in the festival and due to that fact, trading increases in the market. Delhi, Mumbai, and other metro cities had strong demands by buyers for investing in gold bars, coins, and jewelry.
Rahul Mehta, a prominent jeweler in New Delhi, comments on the trend: “On Dhanteras, we always see high buying. This year too is no different, with people showing interest even at higher price levels. The sentiment is positive, both due to cultural beliefs and the good performance of the metal as an investment.”
Its high return rate has attracted traditional investors and those seeking a hedge against inflation. It has also been augmented by the more general economic uncertainty as gold comes across as some form of safe haven when things start getting volatile.
Silver Mirrors Gold’s Movement
Silver prices also surged on Dhanteras in tandem with the surge in gold prices. December silver futures were trading at Rs 97,744 per kilogram on MCX, up 0.33 per cent or Rs 320. Like the yellow metal, silver’s demand has risen, both in investment and industrial consumption. The silver price is watched closely as it tends to reflect the trend of economic improvement as its industrial usage cuts across sectors.
What Determines Gold’s Future Across the Globe?
Several factors will dictate the future prospects of gold: central bank policies, movement of currencies, and economic stability. The next few months will witness movements in gold prices largely at the behest of U.S. Federal Reserve decisions in terms of interest rates together with the kind of dollar strength. On top of these will be geopolitical tensions and inflation rates in the emerging large economies.
In India, the inflation policies of the Reserve Bank and the strength of the rupee are also going to play a very big role. If the rupee weakens further, that is going to add more to the appeal of gold as a hedge, which may once again fuel another rally. However, if inflation starts stabilizing, some analysts expect a cooling effect on the demand for gold.
Dhanteras celebrations have already begun, and festive demand for gold underlines the metal’s cultural and financial significance in India. When prices remain at high levels, some of the technical indicators point out possible pullback and thereby allowing traders and investors an entry into the market.
Outlook is broad and positive and potentially even back to Rs 83,000 or up to Rs 86,000 per 10 grams in months to come. If this slips below the critical marks, the trader needs to look around and adjust the strategies and approaches to match up the changes in the dynamics.
ALSO READ: Beloved crime show CID to make a comeback on television, reuniting with legendary characters