The US central bank, the Federal Reserve, has cut interest rates by 0.50 percent after four years. It has also promised to make similar cuts by the end of the year. It has also been said that there will be a one percent reduction in the year 2025 and 0.50 percent in the next year. Due to these cuts, we may see a rise in gold prices. According to an estimate, gold prices could exceed Rs 78,000 by the end of the year. At the same time, the price of gold will increase by 25 to 40 percent over the next year. This means that in the next year, the price of gold in the international market may exceed $3,000.
According to experts, the coming year will be very good for gold. A 1.5 percent cut in the Federal Reserve rate has been announced. This means that there will be a fall in the dollar index and gold will also be seen to gain support. On the other hand, a lot will depend on who comes to power after the US presidential election. If Donald Trump comes to power once again, he will leave no stone unturned to push the dollar up. The effect of this can be seen in global gold prices. But this effect will only marginally reduce the rise of gold, but will not put an end to it. This means that investors’ income from gold is considered fixed. Let us also try to explain to you in the language of figures how far the price of gold can rise in the coming days.
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Will gold prices rise?
Although gold prices have dropped by $50 from the all-time high, there will be a rise in gold prices in the coming days. Gold prices in the international market may see a rise of up to 40 percent in the next year. Yes, we are not just saying it like that. When we look at the history of the last 30 years, when the Federal Reserve cut interest rates by 50 basis points in 2007, an increase of more than 41 percent was seen in the following year. In August 2019, the Federal Reserve cut the gold price by 25 basis points and over the next year, gold prices saw an increase of up to 38 percent. By March 2020, the Federal Reserve had cut the gold price by 50 basis points and gold gave returns of more than 26 percent over the next year.
What is the prediction this time?
This time, the forecast also looks bullish. According to experts, the price of gold can rise to $3,000 in the next year. This means that in one year, the price of gold can rise by $400-$500. This means that gold can offer investors returns ranging from 17 to 20 percent. This is also the main reason. Firstly, there will be another one and a half percent reduction in the Fed rate cut in the next year. There is no chance that geopolitical tension will ease in the next year. If Donald Trump is elected US president, there is a chance that tensions in the Middle East will increase. Therefore, the investor can seek safe haven.
Gold to rise to Rs 78,000
If we talk about India, gold prices may cross Rs 78,000 by the end of the year. This means that the gold price may see an increase of more than Rs 5,000 from the current level. At present, the gold price is trading below Rs 73,000. This means that the gold price may see an increase of more than 7 percent in the next 100 days. On the other hand, during Diwali, a rise of more than 4 percent can be observed in the gold price. This means that in the next 45 days, the gold price may see an increase of more than Rs 3,000.
What is the reason for the current decline?
On the other hand, the gold price has now fallen by $50 below the record level. Speaking to TV9 Digital, Ajay Kedia, Director, Kedia Advisory, said that there was a surge in gold prices since July. The only real reason for this surge was that the Federal Reserve will cut rates. This sentiment made gold prices rise by $300-$400. Now that the Federal Reserve has cut rates, one thing needs to be understood: the Federal Reserve had earlier said: in the current year rates will be cut by 1.25-1.5 percent. Which was limited to one percent. So the dollar index rose and gold fell.
He further said that gold was also overvalued for some time. But a good rise in gold is expected in the long term. If we all talk about good returns in the next one year, we can see up to 20 per cent in one year. On the other hand, Anuj Gupta, Head – Commodity Currency at HDFC Securities, said that the gold price may touch Rs 75,000 by Diwali. Now that the rate cut is going to happen by the end of the year, gold will find even more support. So the gold price may rise to Rs 78,000 on MCX.
Gold prices in the foreign market?
Talking about foreign markets, there is not much movement in gold prices at the moment. Gold futures on Comex are quoted at $2,587.50 per ounce, down more than $11 per ounce. While a day earlier, gold futures had reached an all-time high of $2,627 per unit. Meanwhile, spot gold prices are stable at $2,562.56 per unit. While a day earlier it had reached an all-time high of $2,600 per ounce.
On the other hand, there is a bullish mood in the silver futures prices. Where silver futures prices are quoted at $30.76 per unit with an increase of 0.24 percent. On the other hand, an increase of more than 1 percent has been observed in the spot silver price. After which the prices are quoted at $30.40 per ounce.
Gold prices fall in India
On the other hand, gold prices are seen falling on the Multi Commodity Exchange. At 10:30 am, gold prices were quoted at Rs 72,868 per 10 grams with a decrease of Rs 187 per 10 grams. While during the trading session, gold price dropped to Rs 72,785 per ten grams. However, gold opened with a drop of Rs 72,930 and a day earlier gold closed at Rs 73,055. On the other hand, silver prices are seen rising. At 10:30 am, silver on MCX is quoted at Rs 88,492 per kg with an increase of Rs 193. Silver also touched Rs 88,548 per kg during the trading session. Incidentally, silver also opened at this level. A day ago, silver had closed at Rs 88,299 per kg.
