Gold is charging ahead at full speed. The price of gold in international markets crossed the milestone level of $3,000 an ounce on March 15. Today, on March 20, gold is trading at around $3,037 while in India, the gold rate today is Rs 89,040 per ten grams.
Gold investors are enjoying a golden moment, with the yellow metal serving as the single bright spot in their portfolio. Gold is up over 33% in the last year and 14% YTD, while equities investments have been a drag so far.
The gold rush is happening really fast. Gold surged from US$2,500 per ounce to US$3,000 in just 210 days.
*Each vertical line signifies the date when each initial $500 incremental level was breached starting with $500 (far left side) and the last line (furthest to the right) representing $2,500. Source: Bloomberg, World Gold Council
The big question now is: how high will gold go after crossing $3,000? Will the price of gold in India hit Rs 1 lakh per ten grams in 2025?
Gold’s recent surge may lead to consolidation or correction, but geopolitical and geo-economic uncertainty is expected to support demand for gold.
However, it must be noted that gold started to move when central banks rushed to accumulate the asset. Central banks have surpassed 1,000 tonnes in gold buying for the third consecutive year purchasing a record 1,180 tonnes in 2024 Earlier, the purchases amounted to 1,082 tonnes in 2022 and 1,037 tonnes in 2023. Here’s why central banks are buying gold like never before.
As if the geopolitical tensions and the incessant buying of gold by central banks were not enough, here’s one other development that needs to be noted.
In a recent move by an American state. Utah has passed a bill to allow state vendors to be paid in gold and silver. Now, this is something that has been talked about for years – gold coming back as a medium of exchange, and it appears that there is some progress on that front too. But then again it’s too early to say whether this trend will continue.
Summing Up
While gold might experience some pause or a price drop, the uncertainty in world politics and economies is expected to keep the demand for gold high.
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