Gold Soars 30% in 2024, Silver Surges 35% on COMEX: MOFSL Report
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Mumbai, Dec 23 (NationPress) Gold and silver have witnessed a remarkable surge in 2024, with respective gains of about 30 percent and 35 percent on the Commodity Exchange (COMEX), as highlighted in a recent report.
The report from Motilal Oswal Financial Services Ltd (MOFSL) indicates that while central bank policies and geopolitical risks are major factors influencing the prices of gold and silver, several other elements also contribute to market dynamics.
In 2024, the global appetite for precious metals has risen significantly. Central banks across the globe, particularly in emerging markets, have been net purchasers of gold for more than a decade. This year alone, they collectively acquired over 500 tonnes of gold, which reflects a strategic move to diversify their reserves amidst ongoing economic uncertainties, as stated in the report.
“Looking forward, the prospects for gold and silver appear optimistic, although some market consolidation or temporary declines could offer buying opportunities. The lenient monetary policy environment, combined with persistent geopolitical risks, is likely to continue providing a supportive environment for gold and silver,” noted Manav Modi, a Commodity Research analyst at MOFSL.
This rising interest from central banks has exerted upward pressure on prices, as these institutions accumulate gold to hedge against the fluctuations of fiat currencies.
The recent revival of gold ETFs, which had experienced outflows in prior years, signals a resurgence in investor interest in gold as a safe-haven investment.
“In India, the domestic demand has escalated, with assets under management in gold and silver ETFs exceeding Rs 30,000 crore and Rs 7,500 crore, respectively. Moreover, the Indian government's reduction of import duties on gold and silver has further stimulated demand, particularly during festive and wedding seasons, propelling prices upward,” the report mentioned.
The overall imports of both gold and silver in the domestic market have been substantial this year, with totals exceeding 700 tonnes for gold and 6,000 tonnes for silver.
“The influence of central bank actions and geopolitical uncertainties on gold and silver prices has been a significant factor, especially in the context of the broader economic landscape,” the report emphasized.
Central bank monetary policies play a crucial role in shaping economic conditions, with recent announcements from the Federal Reserve underscoring this relationship.
The US Fed's decision to implement a 50 bps rate cut demonstrates a proactive strategy aimed at stimulating the economy amid easing inflation and concerns regarding the labor market, as noted in the report.
