Silver to outperform Gold :Talking about the year 2024, silver has left other asset classes behind in giving returns. Recently, silver touched the figure of Rs 1 lakh per kg for the first time. Still it is around Rs 98000. In 2024, silver has given about 40 percent return to investors, while the return in gold was around 25 percent. This year, Sexex has given 11.50 percent return and Nifty has given 12.50 percent return. Experts and brokerages say that silver’s outperformance at the domestic level will continue in future also. Silver can reach the price of Rs 125000 per kg by next Diwali.
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Where will the silver go till next Diwali?
According to brokerage house Motilal Oswal Financial Services Limited, the performance of silver may be better than gold in the mid to long term. In the next 12 to 15 months, it is expected to reach a price of Rs 1,25,000 on MCX and up to $40 on COMEX. This year the return on silver has been around 40 percent, which is high compared to other asset classes. The most important factor behind which is the safe haven of Boeing amidst increasing industrial demand and uncertainties.
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Gold price forecast
Motilal Oswal estimates that the price of gold can reach Rs 81,000 per 10 grams in the mid-term and Rs 86,000 per 10 grams in the long term. On COMEX it is expected to reach $2830 in the mid-term and $3000 in the long term. Barring the year 2021, gold has consistently been one of the best performing asset classes in recent years. From 2016 till now, this precious metal has remained in the green mark at the domestic level. This year, gold has reached all-time high on both Comex and MCX.
Reason for rise in silver and gold
Manav Modi, Commodity Research Analyst, Motilal Oswal Financial Services, says that in the year 2024, both silver and gold prices got support due to market uncertainties, expectations of interest rate cuts, increasing demand and falling rupee. Overall, the market trend is expected to be positive for this Diwali. The months after the US presidential elections will be important for shaping the near-term trajectory of gold. Apart from this, prices have also been supported by rate cuts by the Federal Reserve and increasing geo-political tensions, especially in the Middle East.
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How did gold perform during Diwali?
There are two important events around Diwali this year. One is the election of the US President and the other is the last Federal Reserve policy meeting of 2024. Historically, demand for gold increases during the festive season. Nevertheless, due to the already increased prices, gold demand may be affected this Diwali and may become somewhat weak. There may be a slight decline in domestic demand, yet prices may continue to be supported amid these key events. According to the brokerage, if someone had invested in gold during Diwali 2019, then his return till this Diwali would have been 103 percent.
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According to an analysis of leap year and gold’s historical patterns conducted by the brokerage, since 2011, the only years 2015 and 2016 have been when negative returns were recorded in the 30 days before Diwali. Apart from 2022, pre-Diwali gains have consistently outpaced post-Diwali gains. Brokerage says that gold prices will continue to rise in future. Therefore, if it falls, it will be a buying opportunity. According to the report, a 5-7% decline in gold prices is expected in the near term, after which there will be an opportunity to buy.
Factors affecting gold and silver
rate cut
geo political tension
American election result
industrial demand
vending season
(Disclaimer: The advice to invest in gold or silver asset class is given by the brokerage house. These are not the personal views of Financial Express. There are risks in the market, so take expert opinion before investing.)
