Gold price today: As Christmas 2024 approaches, investors are scrutinizing the returns of different assets. It will be interesting for these investors to know that gold prices have significantly outperformed the major benchmarks of the Indian stock market. While the Nifty 50 index has risen around 8.50 per cent year-to-date, the BSE Sensex has returned 8 per cent. However, to surprise stock market investors, the Nifty Bank index offered a paltry return of 5.25 percent in 2024. In contrast, the MCX Gold Rate has risen about 21 percent since the start of the year, while the price of spot gold has jumped almost 27 percent this year.

According to sotck exchange experts, US Fed rate cut the buzz, geopolitical tensions, gold purchases by the majority of central banks, growing investor demand and the escalation of the trade war after Donald Trump’s return to the White House are some of the important reasons that fueled the stock market crash to higher levels and accelerating gold prices in 2024. They said gold should remain a hedge against inflation next year, but will have to compete with yields of the US Treasury, the market FOREX and certain virtual assets like Bitcoins. They said the Trump factor would be a big trigger next year for stocks and gold, as the trade war is expected to intensify in 2025.

Speaking on the reasons that have fueled gold prices this year, Anuj Gupta, Head of Commodities and FX at HDFC Securities, said: “MCX gold has largely eclipsed other regulated assets in 2024 to various reasons, including the buzz of US Fed rate reduction, geopolitical crisis, purchase of gold by the majority of central banks, growing demand for electronic and physical gold, escalation of the trade war after Donald Trump’s victory in the American presidential election. If these factors favored the yellow metal, they opposed it. stock market. The recent stock market crash is a glaring example of this.

“A confluence of macroeconomic, geopolitical and investment-related factors has driven gold’s performance in 2024. With such strong tailwinds, gold has cemented its position as an exceptional asset in investors’ portfolios individual and institutional. a high of $2,790/oz in international markets, while in domestic markets it soared to a record high of Rs.79,775/10 gm with returns of around 27 percent in international markets. and by over 20 percent (20.91 percent) in domestic markets, gold outperformed most asset classes, including stocks. The benchmark Nifty, which hit a record high of 26,277 in September, has risen 8.5% since the start of the year. said Sugandha Sachdeva, Founder, SS WealthStreet.

How did gold prices overshadow the stock market?

Asked about the key factors that helped gold prices outperform the Nifty 50, Sensex and Bank Nifty indices, Sugandha Sachdeva listed the following five triggers:

1) US Fed rate cut: The US Federal Reserve’s move towards monetary easing amid easing inflationary pressures has significantly supported gold prices. Anticipated and actual rate cuts have fueled demand for gold as a non-yielding asset.

2) Geopolitical tensions: Ongoing global tensions, including the conflict between Israel and Hamas, the war between Russia and Ukraine, and the fall of the Syrian government, have increased the appeal of gold as a safe haven.

3) Gold purchases by the Central Bank: Central banks, particularly in emerging markets, continued their robust accumulation of gold, purchasing 694 tonnes by the third quarter of 2024. This buying spree mirrored 2022 levels, providing a strong structural tailwind for gold price.

4) Growing demand for investment: Renewed interest in gold-backed ETFs has contributed to the price rise. After months of outflows, gold ETFs have seen net inflows of $2.6 billion since the start of the year, reflecting growing investor confidence in the asset.

5) Escalation of the trade war: The US national debt has reached a record $34 trillion, intensifying concerns about fiscal sustainability. This and growing trade war tensions have further cemented gold’s status as a reliable hedge.

Gold price outlook in 2025

On the outlook for gold prices in 2024, Anuj Gupta of HDFC Securities said, “Gold will continue to remain a hedge against inflation, but it is Donald Trump, whose reappointment and his approach to trade agreement during the first year are the most important. will dominate the price of gold to a greater extent. However, the president-elect of the United States will certainly ensure the strength of the American economy; therefore, the US dollar is expected to remain strong throughout the year. Gold will therefore face challenges. US Treasury yields and the FOREX market yields. It must compete with the growing demand for unregulated assets like Bitcoins. However, the trade war is expected to fuel geopolitical tensions and, therefore, I expect tight competition for stock and gold returns in 2025.”

Disclaimer: The above opinions and recommendations are those of individual analysts, experts and brokerage firms, and not of Mint. We advise investors to consult certified experts before making any investment decisions.