Commodity Outlook that featured in the report, Market Outlook 2025, published by Shripal Shah, MD & CEO, Kotak Securities said, Gold to see modest gains in 2025 after 2024 rally on trimmed rate cut bets! The year 2024 has been a landmark year for gold, with Comex gold surging over 40% from its yearly lows to reach an all-time high of $2,801.8 per ounce in October.
This historic rally marks its largest annual gain since 1979. On the domestic front, MCX gold followed suit, climbing over 25% year-to-date due to robust physical demand. The surge has been driven by multiple factors, including the US Federal Reserve’s rate cuts, intensifying geopolitical tensions, and unprecedented central bank demand.
Despite initial headwinds in January, when gold corrected by 4.4% due to a strong US dollar, high bond yields, and global ETF outflows, it rebounded strongly. Investor interest was sustained amid global uncertainties, including political instability, equity market volatility, and geopolitical risks, which reinforced gold’s safe-haven appeal.
Gold saw the biggest monthly rally of 2024 in March by surging nearly 9%, propelled by expectations of US interest rate cuts, declining Treasury yields, and weakening of the US dollar. Robust retail demand and central bank purchases also played a crucial role, with central banks buying over 1,000 tons of gold annually for the past two years. China emerged as the largest buyer, contributing to the strongest start to a year on record for central bank gold purchases.
In tandem, hedge fund activity in March added 285 tons to gold demand, signaling strong market confidence. Domestically, MCX gold prices touched record highs of Rs 67,850 per 10 grams, slightly lagging Comex gold due to rupee strength. Indian gold ETFs saw steady inflows, marking the eleventh consecutive month of positive flows in February, while the Reserve Bank of India (RBI) expanded its gold reserves to an all-time high of 817 tons.
Gold entered a consolidation phase from April to July 2024, with prices hovering below $2,450. April witnessed a 6.7% correction, followed by a 7.4% recovery in May, while June remained a relatively quiet month. During this period, easing demand from China contributed to price stagnation as the People’s Bank of China paused its 18-month gold-buying streak.
Indian gold ETFs experienced outflows in April after 12 uninterrupted months of inflows, reflecting diverging trends in global ETF investments. However, bullish speculative interest surged on the Comex, with net long positions reaching their highest level since before the pandemic, doubling from February to May. This bullish sentiment intensified in July, with net long positions climbing further, as Comex gold broke past consolidation levels, nearing $2,500 per ounce.
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