Why Gold Price Rising in India 2024?
Gold has a significant place in Indian culture, where it has long been viewed as a symbol of tradition and prosperity for generations, Indians have regarded gold not just as a precious metal, but also as a reliable store of value. Since the beginning of 2024, the gold price has taken a hype, this price increase will make some people happy about the gold they have that will have more worth now and also leave some individuals with questions about why it is rising, whether or not it's a good time to invest, and what gold investors need to be aware of. Stay with us until the end to know why the price of gold is increasing.
Gold Price Monthly Movement
| Date | Price | % Change |
|---|---|---|
| Apr-24 | 72,838 | 7.75% |
| Mar-24 | 72,838 | 8.52% |
| Feb-24 | 62,293 | -0.91% |
| Jan-24 | 62,865 | -0.14% |
| Dec-23 | 62,954 | 0.50% |
| Nov-23 | 62,639 | 2.89% |
| Oct-23 | 60,879 | 6.69% |
| Sep-23 | 57,061 | -3.47% |
| Aug-23 | 59,113 | -0.86% |
| Jul-23 | 59,628 | 2.77% |
| Jun-23 | 58,020 | -3.70% |
| May-23 | 60,252 | 0.32% |
| Apr-23 | 60,057 | 1.25% |
The Performance of Gold
The gold market has been quite volatile from January to April 2024, with prices starting at ₹62,865 and jumping to ₹72,838 by mid-April, marking a significant increase of about 15.9% in just over three months. These fluctuations suggest that various factors, such as economic conditions and global events, are influencing the gold market. In the past months of 2023-24, there have been notable movements in the gold market, possibly influenced by factors like market volatility, currency fluctuations, and global events.
Why Gold Price is Rising?
The changes in the prices of gold have raised alarming concerns in the Indian markets. Let’s discover the reasons behind the increasing prices of gold:
Central Banks Buying Gold
Central banks all around the world are buying more gold. They do this because gold is a good way to protect against prices going up too fast. By adding gold to their reserves, central banks aim to diversify their assets and reduce their dependency on other currencies like the US dollar. This increased demand from central banks can drive up the price of gold in the market.
The Best Hedge Against Inflation
Inflation means things get more expensive over time, so your money can buy less. After COVID-19, every country entered an era of inflation. So Gold is seen as a good way to protect your money during inflation because its value usually goes up when prices do. People like to invest in gold when they're worried about prices going up too much. This makes more people want to buy gold, which can make its price go even higher.
US Dollar Depreciation
The United States is currently facing issues with inflation, and their allied nations such as Ukraine and Israel are struggling with war, which is having a negative impact on the economy's fiscal management and growth. As a result, the dollar is becoming weaker in comparison to other currencies.
Gold and the US dollar have an inverse relationship, meaning that when the dollar strengthens against other currencies, gold often becomes more expensive for investors using those other currencies. This can decrease demand and lower gold prices. Conversely, when the dollar weakens, gold prices might increase because gold becomes cheaper in other currencies, which boosts demand.
Shifting Money to Safe Assets (Due to Middle East Conflicts)
Geopolitical tensions and conflicts, especially in regions like the Middle East, can create uncertainty in financial markets. During such times, investors may seek refuge in safe-haven assets like gold. Gold is perceived as a store of value and a hedge against geopolitical instability and economic turmoil. As investors shift their funds into gold and other safe assets during periods of conflict, it can drive up the price of gold.
Should Investors Buy Gold Now?
Is this the right time to catch this golden opportunity, should you join the rush and invest in gold? Here are some factors to gain clarity:
Favourable Environment for Gold's Performance
Right now, the conditions are good for gold to do well. When the U.S. government reduces interest rates, the price of gold tends to go up, based on our research. This means that investing in gold could be a good idea.
Gold's Historical Performance
Looking at how gold has done in the past, it's been a good investment. This adds another reason why people might want to consider investing in gold now.
Digital Gold
Suppliers who collaborate with banks, brokerage houses, and financial technology businesses provide digital gold for purchase. When you invest in digital gold, you may use digital platforms to make progressive small-scale investments over time, from anywhere at any time. This makes investing in gold more accessible to more people. It just takes 5 seconds to make a smart investment in Gold Funds. Steal the top funds that will help you to earn extra money.
Net Inflow of Gold Funds and ETFs
More money is flowing into gold investment funds and exchange-traded funds (ETFs), which are like baskets of different investments. This has pushed gold prices to record highs.
Experts Predict Continued Strength in Gold Prices
People who know a lot about gold think that its price will stay high at least until the second half of 2024. This means that gold could continue to be a good investment for a while.
Gold as a Long-Term Investment and Portfolio Diversifier
Gold has shown that it can be a reliable investment over a long period of time. It's also useful for spreading out risk in an investment portfolio, which is a good thing.
Awareness Tips for Gold Investors
Before you dive into gold, consider these key factors to protect your hard-earned money:
- It is important to remember that while gold is commonly thought of as a secure investment, it can still experience significant price fluctuations, especially in the short-term.
- New investors must recognize that gold doesn't generate income like stocks or bonds do. Instead, investors rely solely on the potential for the price of gold to increase over time for their returns.
- Over the past 40 years, gold's price went up by 510%, which is a lot less than the S&P 500 stock market index, which went up by 3,200%.
- Even if gold did better than the stock market in one year, like in 2024, it's still better to think of gold as something that helps keep your investments steady, rather than just trying to make a lot of money from it.
- It's tough to predict the gold market because of all the different economic and political things happening. So, it's good to think about all the benefits of investing in gold, not just how much the price goes up.
- It's also hard to know how high any metal will go up because there are so many things affecting prices, like what's happening in the economy and the world.
To sum up, while gold is thought to be safe, it can still change a lot in value. It doesn't make money as stocks or bonds do, and how it's done in the past may not match the stock market, but Mutual Fund investment provides long-term security and also helps to achieve your desired corpus.
Conclusion
In summary, the rise in gold prices in India in 2024 is driven by factors like central bank purchases, inflation concerns, and geopolitical tensions. While gold investment offers potential benefits, it's essential to understand the risks and consider alternatives like digital gold and mutual funds, including SIP, for long-term security and wealth growth. By staying informed and weighing all options, investors can make prudent decisions about gold investments.
Best Funds
| Top funds | 1M Return | 6M Return | 1Y Return | 3Y Return | 5Y Return |
|
|
|---|---|---|---|---|---|---|---|
| ICICI Prudential Multi-Asset Fund - Growth | 1.75% | 14.44% | 31.28% | 23.26% | 22.34% | Invest | |
| SBI Long Term Equity Fund - Regular Plan- Growth | 1.63% | 21.84% | 57.21% | 28.41% | 27.73% | Invest | |
| HDFC Top 100 Fund - Growth Option - Regular Plan | 1.61% | 15.94% | 38.14% | 21.82% | 20.19% | Invest | |
| HDFC Balanced Advantage Fund - Growth Plan | 0.8% | 14.14% | 37.88% | 25.15% | 22.04% | Invest | |
| Parag Parikh Flexi Cap Fund Regular-Growth | 0.42% | 16.62% | 41% | 22.29% | 22.97% | Invest |