New Delhi: As Diwali approaches, the discussion regarding investment in gold has intensified. Experts believe that gold prices may cross Rs 1 lakh per 10 grams by Diwali 2025 i.e. next year. Gold has always been an integral part of Indian culture. It is considered a symbol of prosperity and security. In the last few years, gold has given good returns to investors. This trend continues this year also. According to Indian Bullion and Jewelers Association (IBJA) data, the price of gold at the time of Diwali last year was Rs 60,282 per 10 grams. It has now increased to Rs 78,577 per 10 grams. That means gold has increased by more than 30% in one year. Experts believe that this trend of rising gold prices will continue in future also. The main reason for this is the environment of economic and political uncertainty at the global level. Factors like US presidential elections, interest rate cuts by the Federal Reserve are affecting gold prices.
Apart from this, rising inflation and falling rupee are also causing rise in gold prices. In such a situation, investors are considering gold as a safe investment.
According to DSP Mutual Fund Netra Report – October 2024, gold has provided strong returns in local currencies in emerging markets. It is affected by economic and political uncertainty. This may lead to currency depreciation and increase in gold prices.
The report emphasizes the importance of including gold in portfolios as a means to reduce volatility and manage risk. This can improve overall returns. Investors in emerging markets are advised to consider gold as a stable asset with growth potential during periods of uncertainty.
Gold works as defense
Analysts at Ventura Securities said gold acts as a hedge against stock market volatility and global uncertainty. It is not necessary to aim for high returns. This is valuable in diversifying an investment portfolio. Historical data has demonstrated its ability to perform well during periods of low or negative equity returns.
Santosh Joseph, CEO of Germinate Investor Services, believes that considering the current global environment, this is a good time to invest in gold.
Gold prices likely to remain bullish
Experts believe that the gold boom is unlikely to end soon. The US presidential election is just a fortnight away. This is causing a lot of volatility in the global financial markets. Gold is rising due to volatility in other asset classes. Moreover, all eyes are on whether the Federal Reserve cuts interest rates in its upcoming meeting on November 6 and 7, right after the US elections are over.
If the Fed cuts rates in its upcoming meeting, then unexpectedly it will further impact gold prices. Apart from jewelery and input to the asset class, gold is a safe haven for investors in times of uncertainty.
Will it cross the 1 lakh mark by 2025?
Gold is considered the top choice for long-term investments due to its ability to provide both security and reasonable returns to investors. Domestic gold prices have doubled in the last five years. They have increased tenfold in just two decades.
Looking at the current rise in gold prices, it is estimated that by the next Dhanteras and Diwali, the price of gold will cross Rs 1 lakh per 10 grams. With nearly 30% price rise since last November, experts estimate that the precious metal could reach around Rs 1,03,000 per 10 grams by Diwali 2025.