As we approach the end of 2023, the glittering performance of gold and silver continues to captivate investors. Gold has surged by over 12% in the current calendar year, reaching Rs 61,221 per 10 grams on December 11, 2023, compared to Rs 54,556 per 10 grams on December 30 last year. Meanwhile, silver has witnessed a commendable 5% year-to-date rise on MCX.
The momentum in precious metals can be attributed to ongoing geopolitical tensions, expectations of impending rate cuts, and concerns about the health of major economies. Vandana Bharti, AVP of Commodity Research at SMC Global Securities, emphasizes that gold has been resilient in the face of geopolitical uncertainties, economic downturn fears, and expectations of a pause in interest rate hikes.
Bharti highlights the historical performance of gold and silver since their launch on MCX in 2003. Gold, starting at Rs 5,810, has seen a remarkable journey, reaching a record high of Rs 64,640 per 10 grams. Over two decades, gold and silver have yielded impressive returns of 1,012% and 941%, respectively.
Looking ahead to 2024, Bharti predicts that geopolitical tensions, economic concerns, and expectations of rate cuts will continue to influence gold prices. She anticipates that gold on MCX will trade in the range of Rs 57,000-Rs 67,000 per 10 grams with an upside bias. On COMEX, new highs are expected in 2024, with a trading range of $1850-$2250.
In the silver market, a nearly 5% year-to-date increase till December 11 is attributed to increased industrial demand. Technological advancements, particularly in solar energy and 5G, have bolstered silver prices. The forecast for silver demand in 2023 is a record 632 million ounces, driven by investments in photovoltaics, power grids, 5G networks, consumer electronics, and rising vehicle output.
Bharti suggests that the potential downside for silver is seen around Rs 65,000 per kg, while upside targets could reach Rs 88,000 per kg. On COMEX, $30 is identified as a significant hurdle, with support near $20. As of December 31, MCX Silver was valued at Rs 71,303 per kg.
In conclusion, the outlook for gold and silver in 2024 appears promising, fueled by a complex interplay of geopolitical factors, economic dynamics, and technological advancements.
