Festivals in India have always been considered an auspicious time to buy gold jewellery. But this year’s record gold prices have put buyers and investors in a dilemma. In fact, not only did gold hit new highs in 2024, but it also delivered huge returns to investors. The impact of rising prices on markets and procurement is clear. In early trading on Monday, the price of gold in the international market rose to around US$2,720 per ounce.
In this case, people cannot even decide whether to buy gold or not. Rising gold prices in recent months have dampened buyer enthusiasm. During festivals like Karva Chauth and Dhanteras, jewelers expect prices to remain stable and sales surge.
There are so many jewelery items for sale on Karva Chauth
But due to rising prices, many customers prefer lightweight and stylish mangalsutras and rings instead of heavy jewellery. Owing to these lightweight products, the jewelery industry managed to achieve sales worth Rs 3,300 crore across the country on Karva Chauth.
But with the current high prices, it’s difficult to say whether this trend will continue till Diwali. The reason for this is that many people are exchanging old jewelry and investing in new jewelry due to high prices. Experts say gold remains a safe bet in the long term as global uncertainty could push gold prices further.
The possibility of further price increases…
Gold prices could rise by 10% in the coming months. It is expected to touch Rs 80,000 per 10 grams by the end of the year. Tensions in West Asia and global uncertainty have increased gold demand. Experts believe that U.S. interest rate cuts and a weak dollar are also boosting gold prices. During times of global uncertainty, gold investments increase. In addition, the impact of the Federal Reserve’s interest rate decisions on gold has also increased.
This year, gold’s returns have lagged far behind all investment options, including the stock market. Data shows that gold’s return rate in 2024 will be as high as 31.33%, breaking the record of the past 45 years. At the beginning of 2007, investors received a 31.02% return from gold.
Let us tell you that in 2010, investors earned 29.61% returns from gold. The return rate of gold in 2020 was 25.09%, 24.79% in 2002, 24.64% in 2009, 23.54% in 2006, 21.58% in 1986, and 21.53% in 1987. On top of that, investors have never achieved returns greater than 20% in the past 45 years.
When has gold ever caused harm?
Since 1980, gold has had positive returns for 25 years and negative returns for 20 years. The biggest disappointment for investors was in 1981, when gold lost 32.18%. Apart from this, there was no year in which the decline exceeded 30%, with gold falling by 28.04% in 2013 and 20.03% in 1984. After that, in 1997, investors lost 19.58%.
Rising prices and strong returns make gold a safe investment choice. However, due to rising prices, the possibility of sales decline during the holiday season has increased. It is expected that sales may drop by 20% during the holiday season due to high prices.
