Akshaya Tritiya 2024: Gold price rises ₹41,000 in five years. Experts see up to ₹85K peak next year

Akshaya Tritiya 2024: On account of falling US dollar rates and rise in the domestic demand, gold rate today witnessed sharp upside movement during early morning deals. Gold future contract on the Multi Commodity Exchange (MCX) for June 2024 expiry opened higher at ₹71,730 per 10 gm and touched an intraday high of ₹72,888 per 10 gm, logging an intraday rise of around ₹1,200 per 10 gm on the auspicious day of Akshaya Tritiya. In the international market, COMEX gold price has risen to the tune of $39 per troy ounce to $2,379 mark wheras spot gold price is oscillating around $2,3 per ounce level. According to the commodity market experts, gold price today is in uptrend due to the fall in the US dollar prices. They said that the Central Bank of England kept the interest rate unchanges that has put pressure on the US dollar. They said that Indians are clebnrating Akshaya Tritiya today, which has spurt domestic demand as well.

US dollar price in focus

Speaking on the reason for rise in gold rates today, Anuj Gupta, Head of Commodity & Currency said, "Gold price is rising today as the US dollar price has come under pressure as the Central Bank of England has decided to keep interest rates unchanged. As the market was expecting a rise in interest rates, profit-booking has triggered in the currency market leading to rise in the gold prices."

Anuj Gupta went on to add that Indians are celebrating Akshaya Tritiya today, which is considered an auspicious day to buy gold. This has spurt domestic demand for gold and silver, which is also a reason for rise in gold price today.

"Comparing the returns given by gold on Akshaya Tritiya, the yellow metal has surged from ₹31,729 per 10 gm in 2019 to ₹72,750 per 10 gm levels, logging nearly ₹41,000 per 10 gm rise in this period."

Gold price target for Akshaya Tririya 2025

Highlighting upon the triggeres that fueled gold prices in the previous year, Religare Broking said, "The year 2023 proved to be a fruitful journey for precious metals, notably gold, which saw a sharp rise in one year time. The market dynamics witnessed a blend of geopolitical tensions, central bank maneuvers, fluctuations in the dollar index, and shifts in US yields. The preceding years have witnessed a succession of unexpected occurrences stemming from the pandemic, as well as flashpoints such as the Russia-Ukraine conflict and the Israel-Hamas tensions, alongside debt crises. These events have perpetuated a prevailing sense of risk within the market. A noteworthy trend has emerged as central banks worldwide have notably increased their gold purchases, acquiring 1,037 tonnes in 2023."

"The future of gold remains dynamic, shaped by various global factors such as central bank policies, geopolitical scenario, and economic indicators. While the gains seen in the current year are commendable, the historical trend of higher returns during turbulent periods highlights gold's potential to flourish amidst heightened uncertainty," Religare Broking added.

Expecting the gold price to contune scaling new peaks, Motilal Oswal said, "Both gold and silver has registered a positive advance in Q1’24, matching or even surpassing gains in other significant asset classes. In the past, supply and demand issues have not had a significant effect on gold prices, particularly when the market is experiencing more extreme uncertainty. Given the recent, strong increase in gold prices, some cool off in price cannot completely ruled out."

"Comparing gold returns over the last 15 years for Akshaya Tritiya, gold is delivered a 10% CAGR. There have been instances of some price correction, but overall rise in prices have been consistent and steady. There are several platforms for market participants to invest in gold based on their risk profile. From a longerterm horizon, it is advised to invest in SGB, which will help to capitalise the price rise in gold and an additional 2.5% interest each year to the investors. Several other modes to invest could be in form of ETF, which are now a very popular way of investments, exchange traded derivatives, Digital Gold and Physical bars and coins," Motilal Oswal added.

Why you should buy silver ahead of gold?

Batting in favour of silver ahead of gold, the Motilal Oswal research report said, "Silver could outperform gold in a longer period. As per data, Gold and Silver have experienced notable year-todate increases of 13% and 11%, respectively, from last cycle of the new year that starts with auspicious occasion of Akshaya Tritiya."

Motilal Oswal said that there are both positives and negatives for Gold prices at this juncture, lower than expected economic data points, rise in growth concerns, higher rate cut expectations in this year, geo-political tensions, concerns regarding rising debt, increase in demand and fall in US Yields could act as tailwinds for prices. Volatility in election years has always increased in Gold, this year more than 40 countries are lined up for elections, including US and India. Market participants always discount future events in advance, like an early rate cut by Fed, hence any black swan event could further support the prices in future.

Gold price target

"Despite the higher gold price, we believe there is still room for further upside, with prices expected to hit ₹80,000 to ₹85,000 in the upcoming Akshaya Tritiya," said Anuj Gupta of HDFC Securities adding, "MCX gold rate in ₹69,000 to ₹69,500 is a good entry level for the long term gold investors."

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, and not Mint. We strongly advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.