Gold and silver prices have seen notable fluctuations and increases throughout December 2024, reflected strongly as the holiday season approaches.
On December 27, 2024, the price of 24-carat gold reached ₹7,791.3 per gram, marking an increase of ₹280. Meanwhile, 22-carat gold was priced at ₹7,143.3 per gram, up by ₹250. Across India, gold rates have demonstrated recovery, especially noted during this week, with prices rising on average to approximately ₹77,850 for 10 grams for standard purity.
Silver has also enjoyed remarkable gains during the same period, with its price soaring to ₹102,800 per kilogram as of December 27, having risen from ₹101,500 per kilogram just the previous day. This increase marks continued momentum from the earlier week when silver was priced at ₹100,600 per kg, highlighting the asset’s growing popularity among investors.
According to Manav Modi, Analyst at Motilal Oswal Financial Services Ltd, "Weakness in the rupee boosted demand for safe-haven assets such as gold." This influx of interest is largely driven by currency fluctuations and changing investor sentiments, especially as the rupee hit record lows against the dollar.
Market data shows gold prices rose substantially, with recent figures for December 26 showing gold at ₹77,361 for 10 grams, reflecting strong week-on-week performance. Analysts observe this increase as indicative of major market shifts, marking strong demand amid broader economic uncertainties.
Further underlining the dynamics of this market, Saish Sandeep Sawant Dessai from Angel One noted, "The Fed Reserve aggressively cut interest rates... due to stubbornly high inflation." Such moves by the U.S. Federal Reserve heavily influence global financial markets, including precious metals like gold and silver. Higher rates usually diminish the allure of non-yielding bullion, yet investor behavior indicates heightened interest at present.
A detailed look reveals market fluctuations varied by region within India, where prices for gold ranged from ₹77,761 per 10 grams in Chennai to ₹77,775 in Vijayawada. Silver prices were significantly varied, with Hyderabad seeing rates as high as ₹103,400 per kg.
The fluctuations are not unexpected; they reflect underlying market forces, geopolitical events, and economic indicators. Market analysts are preparing for continued volatility as expectations grow surrounding upcoming policy adjustments, including tariffs, deregulation, and tax changes anticipated with the potential shift back to Donald Trump administration policies upcoming in early 2025.
Despite the challenges posed by these changes, the overall sentiment appears to remain cautiously optimistic. The precious metals market often acts countercyclically during economic downturns, providing investors refuge when traditional markets are uncertain.
Traders noted the intervention from banks to stabilize the rupee, which ended the week slightly recovered but still at historically low levels against the dollar at ₹85.50. Such factors compel investors to look toward gold and silver as more stable investments.
Looking forward, the behaviors and movements of precious metals might remain unpredictable yet closely watched. Analysts recommend keeping tabs on consistent economic indicators and shifts as global economies begin to recover from the pandemic impacts and assess newly positioned policies.
