Mumbai, 03, Sep, 2024: September Gold Outlook – As we approach September 2024, investors are closely monitoring gold prices and the various factors that could influence market trends. This month’s outlook reveals crucial insights into what might impact gold prices, including US Federal Reserve decisions, upcoming festivals, and long-term investment strategies. Understanding these elements can help investors make informed decisions about their gold investments.
Key Factors Influencing Gold Prices in September
The most significant factor expected to impact gold prices in September is the US Federal Reserve’s monetary policy. With speculation surrounding potential interest rate cuts, the market anticipates a reduction of 25 basis points, which could lead to a positive movement in gold prices. If the Fed opts for a more substantial rate cut, a sharp increase in gold prices could follow. However, volatility is anticipated, and investors should prepare for fluctuations as the Fed’s policy meeting unfolds.
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Another critical factor is the upcoming festive season. Last year, during Diwali in November, the price of 24-carat gold was around ₹60,000 per 10 grams. This year, experts predict that gold prices could rise to ₹75,000 per 10 grams by Diwali. Historically, the festive season drives up demand, which in turn boosts prices. Thus, planning purchases before the festival may be advantageous for those looking to buy gold.
Investment Strategies for September and Beyond
For short-term investors looking to buy gold for upcoming festivals or weddings, current prices offer a favorable buying opportunity. Given that significant declines are not expected in the near future, purchasing gold now could be beneficial. For long-term investors, systematic investments during market dips could yield favorable returns. Experts forecast that gold prices might not fall below ₹71,000 per 10 grams, with potential increases up to ₹75,000 by the end of the year.
Looking ahead to a five-year horizon, gold is expected to perform well, with potential price increases ranging from $4,400 to $5,000 per ounce internationally. This could translate to gold prices reaching ₹1,00,000 per 10 grams in the Indian market over the next five years. Investors considering long-term investments should consider systematic investment plans (SIPs) in gold to benefit from gradual price increases.
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Government Schemes and Policy Updates
Recent discussions have raised concerns about the potential discontinuation of the Sovereign Gold Bond (SGB) scheme by the Indian government. If implemented, this could be a setback for investors, as SGBs offer tax-free capital gains and an annual interest rate of 2.5%. However, alternative investment options include gold exchange-traded funds (ETFs) and gold mutual funds, which are also viable for small investors. Physical gold can be bought through the MCX demat account for those preferring tangible assets.
Investors currently holding SGBs should avoid redeeming them prematurely to avoid capital gains tax. Holding until maturity is advised to benefit from tax-free returns.
Impact of the ‘One Nation, One Gold Rate’ Policy
The anticipated ‘One Nation, One Gold Rate’ policy could enhance transparency in gold pricing across India. This policy aims to standardize gold rates nationwide, reducing discrepancies seen in different cities. While it might correct mispricing and slightly lower prices, a significant decrease is not expected. The policy is expected to bring greater clarity and fairness to the gold market.
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