The recent hike in gold prices has been quite a delight for existing e-gold investors. The primary reasons behind the upsurge are geopolitical risks, moderation in the USD and global economic uncertainties. The Reserve Bank of India stopped increasing their gold holdings in November and the price of the yellow metal increased further. The demand for bridal jewellery also had a large impact on domestic gold consumption in the last few months.

Gold Price Upsurge from October to December

Though the gold price has not surged uniformly, it has risen by almost 10% in The London Bullion Market Association from early October to mid-December. Geopolitical tension, a fall in bold yields, an easier monetary policy environment and weakening US dollar fuelled investors’ appetite for e-gold. Spot gold price rose by almost 1.6% and reached a three-week high of $2070/oz in the third week of December.

Demand for Gold Amidst Gold Price Hike

Even in the domestic market, gold prices rose by almost 10% in the last 3 months and the stable domestic currency is considered to be the main reason behind it. The high gold price had a direct impact on the demand for physical gold. Though the wedding season has been busy, purchases were less as compared to last year.

After the peak Dhanteras period, jewellery sales volumes reduced and so did store footfalls. People are buying gold to fulfil their needs for the wedding season but are trying to avoid discretionary purchases. In place of physical gold, people are showing more interest in e-gold buy.

Expected Demand for E-Gold in 2024

The existing global geopolitical and economic uncertainties have boosted the demand for e-gold investments. Gold investors are showing more interest in buying e-gold as the new year starts because of the increase in unrestricted spendings, favourable prospects for economic growth in the domestic market and increasing investment inflows.

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Disclaimer: The data provided on this blog is for general informational purposes only. The data is based on our research and understanding, and we cannot guarantee its accuracy or reliability.