Ajay Kedia, Director, Kedia Advisory4 days ago
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Will the rise in gold continue this year also? This question is running fastest in the minds of common people. In fact, last year gold prices saw the fastest rise in any single year in the last decade. Gave more than 20% returns.
The reasons for this ranged from purchase of gold by central banks around the world, geo-political tensions, changes in monetary policies and consumer demand in major markets like India and China. Now this year this trend will continue and more than 20% returns are expected.
There will be a rise in gold due to these main reasons
- Investment in gold will increase as a safe haven against ongoing uncertainties around the world, such as possible escalation of existing conflicts and new geopolitical tensions.
- In emerging markets like India, central banks are actively increasing their gold reserves. This trend will continue in 2025, providing strong support for gold prices.
- Uncertainty over US economic policies, especially with the new Trump administration, could increase demand for gold as a hedge against economic instability.
- In this situation, we estimate that the price of gold on MCX i.e. futures market can reach ₹ 85 thousand per 10 grams.
- Jewelery demand in India grew by 18% due to a 9% cut in gold imports in FY2024 and is expected to grow by 14-18% in FY2025.
- India’s organized jewelery market is expanding in tier 2 and tier 3 cities. Branded jewelery revenues are estimated to grow 18-20% year-on-year in FY2025.
- Gold loans in the country increased by a record 56% last year to Rs 1.54 lakh crore. The trend of buying gold by mortgaging it will increase further this year. This year, gold loans can increase almost seven times and cross the benchmark of Rs 10 lakh crore.
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