Planning to buy Gold this Dhanteras? 57% gain over past two years

Dhanteras is considered an auspicious time for gold buying in India, and many investors consider the precious metal an investment choice amidst global uncertainties. As of October 2024, gold prices in India are around Rs 76,000 per 10 grams, marking a 30.6% increase from the previous Dhanteras and an impressive 57% gain over the last two years.

Despite a 9% cut in import duties earlier in 2024, which initially lowered domestic gold prices, the ongoing geopolitical tensions and increased demand from central banks have increased prices. After dipping post-duty adjustment, the rate rebounded to reach its current level, closely tracking global gold prices. Narinder Wadhwa, Managing Director of SKI Capital, notes that with these changes, India’s gold prices now align more directly with international movements.  

Central bank buying is a significant factor propelling gold’s sustained high value. Amidst economic instability and inflation, central banks worldwide accumulated over 1,000 tonnes of gold in 2023 alone, a trend expected to continue as banks seek to diversify reserves and hedge against economic uncertainties. Renisha Chainani, Head of Research at Augmont, explains that emerging markets, in particular, have increasingly turned to gold to reduce reliance on currencies like the U.S. dollar, especially as geopolitical tensions persist.

Given the uncertainties surrounding the U.S. Federal Reserve’s policies, inflation trends, and geopolitical risks like the ongoing Middle East conflicts, many experts forecast continued strength in gold prices. Some analysts, including Chainani, predict that gold could approach Rs 85,000 in the next six months if global demand continues to climb. Surendra Mehta, Secretary of the India Bullion and Jewellers Association (IBJA), suggests that these factors could push prices beyond Rs 78,000 if political tensions remain high.

There are numerous options for those considering gold as an investment in Dhanteras. Traditional gold jewellery, coins, and bars remain popular, but experts recommend digital gold or gold ETFs for those seeking more accessible storage and liquidity. Moreover, a staggered investment approach—buying gold in intervals—can help manage price volatility, whereas bulk buying may suit those looking to capitalize on any immediate dips due to geopolitical events, according to financial experts at Tata Asset Management.

While the festive season may motivate some to purchase gold, investors should align such investments with long-term financial goals. As Dhanteras approaches, the focus remains not only on gold’s cultural value but also on its role as a hedge against economic uncertainty—a factor that, especially in today’s volatile climate, makes gold an appealing asset for Indian households looking to diversify their portfolios.