Prices in the international market have also come down with the spot gold on COMEX hovering around $2,624.50 per ounce, down from $2,801.8 per ounce in October.
The safe-haven gold is expected to keep shining in 2025, but faces a two-way risk that could dim its sheen.
An easing interest rate cycle and ongoing geopolitical tensions could aid the precious metal’s rally to even Rs 90,000 levels, but if central banks turn hawkish or geopolitical fears ease — investors may move to riskier assets.
Gold delivered 20.6% returns in 2024, closing at Rs 75,746 per 10 grams in the futures trade on the Multi Commodity Exchange of India (MCX).
The price has tapered slightly from its peak of Rs 79,362 after uncertainties surrounding the US presidential election outcome have subsided.
Prices in the international market have also come down with the spot gold on COMEX hovering around $2,624.50 per ounce, down from $2,801.8 per ounce in October.
The yellow metal’s outlook for 2025 remains positive, with gold set to deliver stable returns amid valuation corrections and uncertainties in the equity markets, said Jateen Trivedi, VP research analyst of commodities and currency at LKP Securities.
“Gold has the potential to deliver returns of 12-20%, compared to the 7-10% expected from other assets, making it an attractive choice for risk-averse investors,” Trivedi said.
Analysts project gold to trade between Rs 82,000 and Rs 85,000 next year. They also made a potential best case target of Rs 90,000 and see downside as low as Rs 66,000, depending on how geopolitical pressures and macroeconomic uncertainties play out.
Pranav Mer, vice president of commodity & currency research at JM Financial Services anticipates some consolidation, with gold testing levels of $2,900–$3,000 internationally.
“Gold prices are likely to see some consolidation in the coming year but the bias is expected to remain positive, considering the metal’s safe-haven allure and best hedge in times of uncertainty,” he said.
Even Hareesh V, head of commodities at Geojit Financial Services sees gold in a steady price range, but expects gold to face pressure if the dollar’s rally continues and geopolitical concerns fade.
Any adverse effect on major economies such as China, which is one of the largest consumers of gold, due to trade policies taken by the new US government, a weaker dollar, and central banks’ sustained gold purchases may boost the prices of gold, analysts said.
Interest rate cycles will be carefully watched as central banks globally shift towards lower interest rates, which would boost liquidity and weaken the US dollar.
However, the US Federal Reserve has already declared that instead of the much anticipated four cuts, they will only make two cuts in 2025.
Investors can consider Sovereign Gold Bonds (SGBs), Gold backed ETFs, or MCX forward contracts for steady returns and diversification.
Source: www.financialexpress.com