Gold prices in India continued to rise for the third consecutive day, tracking the surge in international prices which has reached a 1-week high. Gold prices gained momentum after Ukraine ignored all the warnings of Putin and attacked Russian soil with US-manufactured long-range missiles. Global brokerage Goldman Sachs said, to go for yellow metal and predicts a target of $3,000 on spot gold.

Gold Prices In India:

24K Gold Prices: The 100 grams of gold here surged by Rs 5,500 to Rs 7,76,200, while 10 grams of gold is up by Rs 550 to Rs 77,620. The cheapest gold is Rs 7,762 per 1 gram.

22K Gold Prices: In this carat, gold is available at Rs 7,11,500 in 100 grams, surging by Rs 5,000 on Wednesday. While gold price is up by Rs 500 to Rs 71,150 for 10 grams, and the cheapest gold is Rs 7,115 per 1 gram.

18K Gold Prices: Coming to this carat, gold price was up by Rs 4,100 to Rs 5,82,200 in 100 grams, and up by Rs 410 in 10 grams to Rs 58,220. The cheapest gold is Rs 5,822.

MCX Gold Prices:

MCX will be closed due to the general assembly election in Maharashtra. BJP, Congress and other local parties will compete for the 288 members seat of the 15th Maharashtra Legislative Assembly 2024. Voting will open on Monday, November 20, while the results of the votes will be announced on November 23, 2024.

After market hours of November 19, MCX gold with December expiry ended flat at Rs 75,585 per 10 grams, while silver of the same expiry date closed at Rs 90,630 per 1kg.

US Gold, Spot Gold:

Spot gold surged to hit an intraday high of $2,641.86 an ounce on Wednesday, while US gold futures with December expiry climbed to hit an intraday high of $2,645.00 an ounce.

Goldman Sachs Recommendation On Gold:

The global brokerage predicts that yellow metal could scale to a new high in 2025, tapped by demand for bullion among central banks alongside expected rate cuts in key US federal fund rates. Also, geopolitical tensions add to their upside.

In a note, Daan Struyven, Managing Director & Head of Research at Goldman Sachs said, “Go For Gold”, while maintaining the brokerage’s target of $3,000 an ounce by 2025-end.

In Goldman’s view, the yellow metal so far has recorded powerful rally in 2024, hitting new records, before pulling back in the immediate aftermath of Trump’s win in the US election, which was the key driving factor for the dollar index. That being said, the brokerage believes Trump’s regime could drive bullion, while adding, that the commodity’s advance has been underpinned by increased official-sector buying and the Fed’s pivot to easier policy.

Goldman also believes that an unprecedented escalation of trade tensions could revive speculative positioning in gold.

Earlier, on October 29, Goldman’s analyst Lina Thomas wrote in her team’s report, that gold usually trades closely in line with interest rates. As an asset that doesn’t offer any yield, it typically becomes less attractive to investors when interest rates are higher, and it’s usually more desirable when rates fall. While that relationship still holds, central bank purchases have been a powerful force, resetting the level of gold prices higher since 2022.

Thomas added, that the relationship between changes in the gold prices and changes in interest rates still exists, but sizable central bank purchases of gold bars have reset the relationship between rate and price levels since 2022. Goldman Sachs Research estimates that 100 tonnes of physical demand lifts gold prices by at least 2.4%.

Additionally, Thomas’ report had said that concern about the risk of financial sanctions is likely one of the reasons central banks have increased their buying of gold. Emerging market central bank purchases of gold have risen notably since the freezing of Russian central bank assets in 2022, following Russia’s invasion of Ukraine.

On Wednesday, the Trading Economics data pointed out that support for safe-haven assets increased amid renewed tensions between Russia and Ukraine. Reports indicated that Ukraine launched its first missile strike on a Russian border region using Western-supplied weaponry, while President Putin expanded Russia’s nuclear doctrine to permit an atomic response to conventional attacks.

Thereby, gold prices have recovered about 38% of the losses that they witnessed in the first half of November, where they were at a 2-month low.

Hence, Goldman continues to predict precious metal to rise to $3,000 per troy ounce by end-2025.

Story first published: Wednesday, November 20, 2024, 12:15 [IST]