Gold Rate Today: After three consecutive months of gains, gold prices in India witnessed a decline of approximately 2.60% in November 2024. The drop was primarily driven by geopolitical developments, including a ceasefire between Israel and Hezbollah, and the strengthening US Dollar Index. However, experts suggest that escalating tensions in the Russia-Ukraine war and the Indian wedding season could provide strong support for a rebound in gold prices.
Gold Rate Today: Why Did Gold Prices Fall in November 2024?
Commodity experts attribute the fall in gold prices to a combination of international and economic factors:
- Ceasefire Between Israel and Hezbollah: The announcement of a truce reduced geopolitical risk premiums, which had been boosting gold prices earlier.
- Strengthening US Dollar: Following Donald Trump’s victory in the US Presidential elections, the US Dollar Index showed significant strength, pulling gold prices lower.
- US Fed Rate Concerns: Mixed economic data has cast doubt on the Federal Reserve implementing a rate cut in December 2024, further weighing on gold’s appeal.
Gold Price Levels and Market Trends
In November 2024, the MCX gold rate dipped ₹2,069 per 10 gm for the December contract and ₹1,851 for the February expiry. However, experts foresee a potential rebound, with key levels to watch:
- Resistance: ₹78,800 per 10 gm
- Support: ₹73,500 per 10 gm and further at ₹71,700 per 10 gm
According to Sugandha Sachdeva, Founder of SS WealthStreet, the renewed geopolitical tensions between Russia and Ukraine have reignited safe-haven demand for gold. This, coupled with the wedding season in India, is expected to boost both global and domestic demand for the yellow metal.
Russia-Ukraine War Escalation: A Key Trigger
The Russia-Ukraine conflict continues to drive global uncertainty. Russia’s warning of broader escalation following Ukraine’s use of Western-made long-range missiles has added to the geopolitical premium on gold prices. These developments are likely to support gold as a safe-haven asset in the near term.
Wedding Season in India: Boosting Physical Demand
In India, the ongoing wedding season is another critical factor contributing to the physical demand for gold. Anuj Gupta, Head of Commodity & Currency at HDFC Securities, noted, “Wedding season demand in India is expected to work alongside global geopolitical triggers to fuel a rebound in gold prices after November’s sharp fall.”
US Fed Meeting and Economic Data: Impact on Gold
All eyes are now on the US Federal Reserve’s December meeting. While US economic growth in Q3 matched expectations at 2.8%, inflation as measured by the PCE Index rose slightly, casting uncertainty on the possibility of a rate cut. A resilient US economy could cap gains in gold, but any dovish signals from the Fed might reverse this trend.
Should You Invest in Gold Now?
The combination of geopolitical tensions and seasonal demand creates a positive outlook for gold in the near term. If you’re planning to invest, experts suggest watching the following triggers:
- Geopolitical Developments: Any escalation in the Russia-Ukraine conflict could push prices higher.
- US Fed Policy: A dovish stance or rate cuts by the Federal Reserve could weaken the dollar and strengthen gold.
- Wedding Season Demand: Domestic physical demand is expected to remain strong until early 2025.
Gold prices may have dipped in November, but the near-term outlook remains bullish, supported by geopolitical risks and robust domestic demand. Investors should closely monitor key levels and global developments before making a decision. For now, the ₹78,800 per 10 gm mark remains the key resistance to watch.
Disclaimer: Investment in gold is subject to market risks. Consult with a financial advisor before making decisions.
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