Gold prices fell on Monday (October 28), a day before Dhanteras, traditionally a time for gold purchases in India. The international rates were pressured by a stronger US dollar. Spot gold slid by 0.5% to $2,733.01 per ounce, and US gold futures dipped by 0.3% to $2,745.5.
In India, the 24-carat gold rate was trading at ₹80,430 per 10 grams, while the 22-carat variant, popular for jewelry, was priced at ₹73,740 per 10 grams.
The dollar index gained 0.2%, its strongest monthly rally since April 2022.
This dollar strength has dampened gold’s appeal as a safe haven.
Tim Waterer, Chief Market Analyst at KCM Trade, noted, “The US dollar’s rally after the Japanese election has hurt gold’s appeal.”
However, he also pointed out that “gold still looks well-positioned to push towards $2,800 per ounce, depending on upcoming economic data.”
Key data ahead: Fed and employment figures
This week, investors are watching US economic reports, including the employment data, job openings, and core Personal Consumption Expenditures (PCE), closely tied to inflation.
These reports could influence the Federal Reserve’s next steps on interest rates, with markets already predicting a high likelihood of a quarter-point rate cut in November.
Lower rates typically boost gold’s appeal by reducing the opportunity cost of holding non-yielding bullion.
Geopolitical tensions and demand for safe-haven assets
Gold reached an all-time high of $2,758.37 last week amid geopolitical concerns, with safe-haven buying surging after heightened tensions in the Middle East.
Israeli airstrikes in Iran and mounting election uncertainties in the US, with a close race between Donald Trump and Kamala Harris, have added to the overall uncertainty driving interest in gold.
In India, with Dhanteras—a day traditionally seen as auspicious for buying gold—falling on Tuesday (October 28), demand may rise as people prepare for Diwali.
“Given the current global environment, it remains a good time to invest in gold,” advised Santosh Joseph, CEO of Germinate Investor Services, emphasising gold’s role as a hedge against macroeconomic risks.
Is it the right time to buy gold?
Experts see the recent dip as a potential buying opportunity for long-term investors.
Sandip Raichura, CEO of Retail Broking and Distribution at PL Broking, pointed to a “bull flag pattern” in gold, signalling further upward momentum.
Geopolitical risks combined with the potential for interest rate cuts create a favourable outlook for gold appreciation.
Experts recommend that gold should ideally make up 5-10% of an investment portfolio to provide long-term security against economic instability and inflation.
As Dhanteras approaches, the short-term dip could be seen as an opportune entry for those looking to balance their portfolios with the stability gold provides.
Content retrieved from: https://www.cnbctv18.com/personal-finance/gold-rates-fall-india-dhanteras-diwali-prices-for-24-karat-22-karat-gold-19499984.htm.
