Gold prices near three-month highs: Is it still a good investment bet
Gold prices climbed near three-month highs on Friday, January 24, buoyed by a weaker dollar and uncertainty over US President Donald Trump’s trade and monetary policies.
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Spot gold rose 0.7% to $2,773.57 per ounce as of 0505 GMT and touched $2,777.10 earlier, the highest since October 31, 2023.
In India, 24K gold traded at ₹82,080 per 10 grams, while 22K gold was quoted at ₹75,240.
Prices remained stable at record-high levels compared to Thursday.
US gold futures climbed 0.6% to $2,781 per ounce, extending weekly gains beyond 2%.
Key drivers behind the rally
Weak dollar: The dollar slipped more than 1% this week, marking its worst weekly performance in two months. This made gold cheaper for foreign buyers, fueling demand.
Trump’s policies: US President Donald Trump’s calls for immediate interest rate cuts and unclear tariff policies heightened market volatility, pushing investors toward gold as a safe haven.
Global interest rates: The Bank of Japan raised rates to levels not seen since the 2008 financial crisis. Markets now await decisions from the US Federal Reserve and European Central Bank next week.
Rahul Kalantri, VP Commodities at Mehta Equities, noted, “Gold has support at $2,742-$2,724 per ounce and resistance at $2,780-$2,794 per ounce. In India, gold has support at ₹79,470-79,280 per 10 grams and resistance at ₹79,820-79,980 per 10 grams.”
Market sentiment and outlook
The bullish momentum in gold is expected to continue, with analysts projecting new record highs.
Kyle Rodda, a market analyst at Capital.com, said, “The trend for gold remains bullish, and we are on track to hit the $3,000 per ounce milestone this year.”
Renisha Chainani, Head of Research at Augmont, emphasised that gold is on the verge of a significant breakout due to economic uncertainties and inflation concerns.
Should one invest in gold now?
Gold’s safe-haven appeal makes it a preferred asset during global uncertainty.
However, higher interest rates could dampen its allure.
Investors should monitor key events like the upcoming Fed meeting on January 28-29 for further cues.
For Indian buyers, the rupee’s movement against the dollar and local demand will influence domestic prices.
Experts recommend using dips as buying opportunities while maintaining a long-term perspective.