As the festive season approaches and the US Presidential Election 2024 looms, investors are closely watching the gold market, trying to assess the best time to enter or exit their positions.
Gold, traditionally seen as a safe-haven asset, has been on an uptrend, reaching record highs both internationally and domestically. This article explores whether it’s a smart move to buy gold before Diwali 2024 and hold onto it until the US Presidential Election results are announced.
Current Gold Price Trends
The gold market has seen significant upward momentum in recent weeks. On Friday, the MCX gold rate hit a new record high of ₹77,839 per 10 gm, while the spot gold price reached $2,722 per troy ounce. This surge in gold prices is driven by several factors, including:
- Geopolitical Uncertainty: Rising global tensions, particularly in the Middle East, have boosted gold’s appeal as a safe-haven asset.
- US Federal Reserve: Potential interest rate cuts by the Fed are pushing investors toward non-yielding assets like gold.
- US Presidential Election: The uncertainty surrounding the outcome of the US elections is contributing to market volatility, which is historically favorable for gold.
Why Gold Prices Are Skyrocketing
According to experts, several factors are currently driving gold prices higher:
- Geopolitical Uncertainty: Ongoing tensions in the Middle East and the possibility of escalating conflicts, particularly between Israel and Iran, are prompting investors to flock to gold for safety.
- US Fed Rate Cuts: As inflation in the US shows signs of cooling, many expect further rate cuts from the Fed in November and December, making gold more attractive in comparison to other assets.
- US Presidential Elections: The looming election is creating uncertainty about the future fiscal and monetary policies. Donald Trump’s potential victory could lead to market fluctuations, with gold expected to perform well amid this volatility.
- Global Monetary Easing: Central banks worldwide, including the European Central Bank, have adopted a more accommodative stance, further supporting the upward trend in gold prices.
- Festive Demand: In India, the demand for physical gold typically spikes during the festive season, especially around Dhanteras and Diwali, which are seen as auspicious times to buy gold.
Should You Buy Gold Before Diwali?
Many experts are advising investors to buy gold before Diwali 2024, citing both sentimental and financial reasons. Colin Shah, Managing Director of Kama Jewelry, suggests that given gold’s cultural importance during Diwali and the current uptrend, it could be a favorable time to invest. Diwali is one of the biggest gold-buying festivals in India, and demand is expected to surge in the coming days.
Hold Until After the US Presidential Election?
While buying gold before Diwali is widely recommended, the big question is whether to hold onto it through the US Presidential Election.
- Sugandha Sachdeva, founder of SS WealthStreet, believes that holding gold until after the election results could prove beneficial. The US elections are expected to introduce market volatility, which traditionally favors gold. If Trump wins, his fiscal policies could create a favorable environment for further gold price appreciation. However, timing the exit is key, and a well-timed sale after the election could help investors lock in significant gains.
Conclusion
With gold prices already at record highs, investors may wonder if it’s too late to jump in. However, geopolitical uncertainty, US Fed rate cuts, and the US Presidential Election could drive prices even higher.
Buying gold before Diwali 2024 and holding until after the election results may offer an opportunity to maximize returns. As always, it’s important to consult with a financial advisor to ensure your investment strategy aligns with your financial goals.
Disclaimer
This article is for informational purposes only and should not be considered financial advice. Please consult a certified financial advisor before making any investment decisions.