Gold Prices Hit All-Time High on MCX
Gold prices have shattered previous records yet again, reaching an all-time high of ₹88,499 per 10 grams on the Multi Commodity Exchange (MCX). This surge comes just days after gold crossed the ₹88,000 mark on Holi, demonstrating continued bullish momentum in the market. As of March 18, gold futures were trading at ₹88,367 per 10 grams, reflecting a sharp increase of ₹344 from the previous session.
With geopolitical tensions, inflation concerns, and expectations surrounding the Federal Reserve’s upcoming policy meeting, gold’s rally remains robust. Experts suggest that gold’s strong performance in global markets is fueling this domestic price surge.
Global Gold Market Trends: Unstoppable Rise in New York and European Markets
The surge in gold prices is not limited to the Indian market. In New York’s COMEX exchange, gold futures have reached a record $3,023 per ounce, marking an increase of $17 per ounce. Similarly, spot gold prices have climbed to $3,017.21 per ounce, reflecting a bullish global trend.
European and British Markets Join the Rally
- In Europe, gold prices surged by €17 per ounce, hitting €2,764.44.
- In the UK, the price rose by £14 per ounce, reaching £2,323.68.
These global price movements indicate sustained investor interest in gold as a safe-haven asset, driven by uncertainty in financial markets and ongoing geopolitical developments.
Why Are Gold Prices Rising? Key Factors Behind the Surge
Several fundamental and macroeconomic factors are contributing to this unprecedented rise in gold prices:
1. Federal Reserve’s Upcoming Policy Decision
The Federal Reserve’s policy meeting is set to commence on March 18, with an announcement on interest rates expected on March 19. Investors are anticipating a 0.25% rate cut, which could further weaken the US dollar and drive gold prices higher. Lower interest rates tend to boost gold’s appeal, as the opportunity cost of holding non-yielding assets decreases.
2. Geopolitical Uncertainty and Tariff Wars
Ongoing geopolitical tensions and trade disputes are prompting investors to flock to gold as a safe-haven investment. Historically, gold has performed exceptionally well during periods of political and economic instability, making it an attractive asset amid the current global scenario.
3. Central Bank Gold Purchases at Record Levels
Central banks worldwide are aggressively purchasing gold to strengthen their reserves. Countries such as China, Russia, and India have significantly increased their gold holdings, further boosting global demand and pushing prices higher.
4. Strong Demand from Investors and Jewelers
Gold remains a preferred choice for investors and jewelry buyers, especially in India, where cultural and festive demand drives seasonal price hikes. With wedding seasons and major festivals on the horizon, demand is expected to remain robust.
How Much Has Gold Increased in 2024?
The rapid surge in gold prices in 2024 has been extraordinary. Here’s a detailed breakdown:
- On December 31, 2023, gold was priced at ₹77,456 per 10 grams.
- As of March 18, 2024, gold has reached ₹88,499 per 10 grams.
- This represents a massive ₹11,043 increase, marking a 14.25% rise in just 77 days.
- In March alone, gold prices have surged by ₹6,280 per 10 grams, reflecting a 7.64% increase.
Such a significant price jump within less than three months is rare, indicating the strong bullish sentiment in the gold market.
Can Gold Prices Hit ₹1 Lakh Soon?
Given the current trajectory, many experts believe that gold could soon breach the ₹1,00,000 per 10-gram mark. Here’s why:
- To reach ₹1 lakh per 10 grams, gold needs to rise by another ₹11,500.
- This translates to a 13% increase, which could materialize in the next 75 days if the current trend continues.
- Considering gold has already surged 14% in less than 80 days, a further 13% rise seems plausible.
If global uncertainties persist and central bank buying continues, gold could reach ₹1 lakh sooner than expected.
What Investors Should Do Now
For investors considering gold, here are some key takeaways:
- Short-Term Traders: With gold prices at record highs, short-term traders may consider booking partial profits while keeping an eye on key global events.
- Long-Term Investors: Those looking at gold as a hedge against inflation and geopolitical risks may continue accumulating, as long-term trends remain bullish.
Diversification: Investors should diversify their holdings, balancing gold investments with other asset classes to mitigate risk.
