Gold rate today: On account of three US Fed rate cut buzz in 2024, gold price finished on an exceptionally positive note in the last session of FY24. Ahead of the end of FY24, the gold futures contract on the Multi Commodity Exchange (MCX) for April 2024 expiry ended at ₹67,800 per 10 gm level after climbing to a new lifetime peak of ₹67,850 per 10 gm. While finishing at the ₹67,800 level, MCX gold rate registered around ₹11,000 per 10 gm rise in the last two-quarters of the current fiscal. Spot gold price finished at the $2,254 per ounce mark on the last trade session of FY24.
According to commodity market experts, the gold price rally may continue in FY25 as the US Fed is expected to declare three interest rate cuts in 2024. So, there would be three US Fed rate cuts in the first nine months or say first three quarters of FY 2024-25. They said that geopolitical tension, ease in the US inflation, and US dollar rates are expected to fuel MCX gold rate up to ₹75,000 per 10 gm level in the next financial year.
Speaking on the gold price rally in FY24, Sugandha Sachdeva, Founder of SS WealthStreet said, “Gold price has experienced a remarkable surge, ascending by over ₹11,000 per 10 gm in the last two quarters of the current fiscal year, capturing considerable attention. While silver has made attempts to ascend, the white metal has encountered resistance around the ₹78,000 to ₹78,500 per kg threshold amid supply pressure. However, a convergence of pivotal factors suggests that this bullish trend is poised to persist for both gold and silver in the next fiscal year, with gold shining even brighter on the canvas.”
US Fed news in focus
Speaking on the factors that may dominate gold prices in the next financial year, Anuj Gupta, Head of Commodity & Currency at HDFC Securities said, “Rally in the gold and silver prices ahead of the end of FY24 was mainly fueled by US Fed rate cut buzz and easing US inflation. So, the market has already started to discount much talked three US Fed rate cuts in 2024. Apart from this, geopolitical tension and ease in the US economy on cooling inflation may continue to provide support to the precious yellow and white metal prices in the next financial year 2024-25.”
Anuj Gupta of HDFC Securities said that the first six months would be crucial and one should plan one’s investment in the precious metals by keeping a tentative timeline for the beginning of the US Fed rate cut in 2024. So, the first US Fed meeting in FY25, which is scheduled from 30th April to 1st May 2024, would be important for gold and other precious metal investors. The US Fed may initiate a rate cut regime at the beginning of the new financial year, Anuj Gupta of HDFC Securities said.
Also Read: FY25 outlook positive for FPI inflows in India, say experts
“Gold price may touch $2,350 per ounce in the international market by the end of September 2024 if the US Fed decides to lower interest rate in its upcoming FOMC meeting,” said Anuj Gupta.
On how a lower interest rate regime would impact gold and silver prices, Sugandha Sachdeva said, “Globally, declining interest rates will bolster gold prices by reducing the opportunity cost of investing in the precious metal. Moreover, this may signify a depreciation in fiat currencies, particularly the dollar index, thereby stimulating interest in gold. Additionally, the ongoing buying spree by major central banks is expected to persist into the next fiscal year and shall continue to underpin the gold rally.”
Geopolitical uncertainties
On other factors that may dominate gold and silver price movement in FY25, Sugandha Sachdeva said, “Geo-political uncertainties further contribute to the allure of gold as a safe-haven asset. With upcoming elections scheduled in several major economies, the geo-political landscape will be enveloped by a lot of uncertainty, potentially heightening the attractiveness of gold. The fluctuating rupee-dollar exchange rate, with the Indian currency nearing record lows, is poised to drive gold prices higher in domestic markets.”
“Taken together, these factors indicate a trajectory towards new record highs for gold in FY25, with projected levels ranging between ₹72,000 to ₹75,000 per 10 gm, while key support rests at ₹61,200 per 10 gm and then ₹59,500 per 10 gm mark. Internationally, gold price is expected to trend towards the $2,370 to $2,450 per ounce range,” said Sugandha when asked about the outlook for the yellow metal.
Silver price outlook
Speaking on the outlook for silver price in FY25, Sugandha Sachdeva said, “Silver holds promise with a robust demand outlook stemming from global green energy initiatives, 5G technologies, and the electronics segment. Although gold is anticipated to outpace silver initially, once silver overcomes the resistance zone of ₹78,000 to ₹78,500 per kg, it is anticipated to make significant strides towards the ₹88,000 to ₹95,000 per kg range in the next fiscal year.”
Disclaimer: The views and recommendations above are those of individual analysts, experts, and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.
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