Gold futures hovering at record high on MCX

Gold prices have been on a stellar run recently, reaching all-time highs of Rs62,700 per 10 grams at MCX. It has rallied nearly 10% on MCX in the last two months and 14% year-to-date - Tapan Patel, fund manager (commodities), Tata Asset Management, tells Bizz Buzz

Positive Global Cues

• Geo-political unrest
• Possible rate cuts
• Easing inflation
• Job market uncertainty

Mumbai: In a surprising turn of events, gold prices have reached historic highs, setting records both globally and in India. As of December 1, 2023, the price of gold in India hit an all-time high of Rs62,700 per 10 grams at MCX. This marks a significant 10 per cent increase in the last two months and a whopping 14 per cent rise since the beginning of the year (Data Source: Bloomberg). However, gold futures on MCX hovering above Rs62,170/10gm on Tuesday.

Talking to Bizz Buzz, Tapan Patel, Fund Manager (Commodities), Tata Asset Management, said: “Gold prices have been on a stellar run recently, reaching all-time highs of Rs62,700 per 10 grams at MCX. It has rallied nearly 10 per cent on MCX in the last two months and 14 per cent year-to-date.”

So, why is this happening? The current situation strongly favors investing in gold. Many believe that the interest rate, which affects how much you earn from your investments, might be cut soon. The CME, Fed watch tool, suggests a possible rate cut in March 2024. “This optimism comes from factors like easing inflation, job market uncertainties, and geopolitical tensions”, he added.

Interestingly, despite less interest in buying jewelry, global central banks are buying a lot of gold – over 800 tonnes this year alone (WGC). Patel further highlighted, “The recent fall in bond yields and the dollar index has pushed Comex gold prices close to $2,050 per ounce, not far from the all-time high of $2,077 per ounce. Additionally, a weaker rupee has helped gold prices in India reach new heights.”

Looking ahead, gold prices might stay high for a while due to global factors and geo-political issues. This situation prompts a reminder for investors to stay alert and consider different ways to invest in gold, especially if prices take a dip. In conclusion, the excitement in the gold market is drawing attention as prices break records. Investors are encouraged to stay informed and explore opportunities in this unique and unprecedented market scenario, where the allure of gold seems brighter than ever.