Gold’s appeal as a safe haven investment and a perfect hedge against inflation is likely to continue in 2024 as consumers face high commodity prices and elevated interest rates worldwide thus overheating financial markets. Therefore, investment in gold against alternate asset classes including crude oil, real estate, bonds, and bank deposits may yield better returns in 2024.
In 2023, gold outperformed other investment products as safe-haven buying triggered by the United States interest rate pause, geopolitical uncertainties, and high inflation amid a global economic slowdown. With 13% returns, gold continued to be the most attractive investment option in 2023.
The precious metals saw uninterrupted buying interest from investors, supported by a recent Santa rally in the equity markets during the Christmas season. Glittering is better than risk-free investment avenues such as bank fixed deposits (FDs), public provident funds (PPF), and other government-supported small saving schemes. Consumers’ appetite was seen throughout the year across all forms of gold products, such as physical, bonds, and paper gold.
Gold has proved as the biggest financial security during global economic slowdowns. Major economies, such as the United States and China, continue to face challenges in picking up the growth rate of the pre-pandemic level. Gold has proven to be the biggest assurance for future growth. Investors have been buying bullion this year due to fears of an imminent economic slowdown. They are taking a long-term perspective on gold, as the lustrous metal has yielded over 11% returns in the last 20 years.
Saiyam Mehra, Chairman of All India Gems & Jewellery Domestic Council (GJC), stated, “Gold has been a timeless allure for Indian consumers following a similar trend overseas, reaching an all-time high record of Rs 64,460 per 10 grams during this year and outshined other asset classes in 2023.
In the international markets, spot gold surpassed the previous record high of $2081 an oz. This signifies that consumers’ appetite for gold is growing. It is always prudent to add gold to your portfolio for assured income and better returns. Continuing the global economic uncertainty will certainly catapult gold to much higher levels in 2024.”
Rajesh Rokde, Vice Chairman of All India Gems & Jewellery Domestic Council lauded gold’s returns in 2023 and hoped that this trend will continue in 2024 as well. “The US banking crisis, the real estate menace in China, the prolonged Ukraine war, and the Middle East instability increased investors’ confidence towards gold.
High global inflation and continuous interest rate hikes also raised concerns about the global economy and increased gold’s appeal as the best option for assured future returns, at least during times of crisis. Looking at the bright prospects, global central banks purchased 800 tonnes of gold in 2023. Therefore, the year 2024 offers immense potential and perhaps the only investment option for assured returns.” Economic uncertainties and geopolitical tensions suggest a 2024 rise in gold prices which emphasizes the yellow metal as a vital portfolio hedge during downturns. Gold prices may see an upsurge of $2,300 an oz, translating thereby to Rs 70,000 per 10 grams in 2024. Despite forecasts for projecting gold to reach new highs next year, uncertainties persist. If economic conditions worsen, driving increased demand for defensive assets, gold prices could rise, offering a potential upside beyond all past predictions.