Gold prices continued their upward trend on Thursday (October 24), reflecting both domestic and global market movements. In India, gold prices hovered around ₹80,000 per 10 grams.

Globally, spot gold rose by 0.3% to $2,725.51 per ounce, following a record high of $2,758.37 per ounce earlier in the week.

Key factors driving gold prices

Safe-haven demand

Gold’s appeal as a safe-haven asset has been supported by geopolitical tensions in the Middle East and uncertainty surrounding the upcoming US presidential election.

Israeli strikes and Hezbollah’s retaliatory missile attacks have created an atmosphere of caution, driving investors towards gold.

US election jitters

With less than two weeks to go before the November 5 US elections, the tight race between Vice President Kamala Harris and Republican Donald Trump is fueling market uncertainty.

Historically, such political events tend to boost safe-haven assets like gold, as investors seek protection against volatility.

Geopolitical risks and economic factors

Sugandha Sachdeva, founder of SS WealthStreet, noted that geopolitical risks, a potential US monetary easing cycle, and central bank purchases are likely to push gold prices higher, possibly hitting $2,800 per ounce by year-end.

She also projected gold could surpass $3,000 per ounce in 2025.

Impact of US dollar and interest rates

Gold’s gains have been tempered by a firmer US dollar, which remains near a three-month high. A stronger dollar makes gold more expensive for non-dollar buyers, limiting further price rallies.

However, expectations of a Federal Reserve rate cut are adding to the bullish sentiment in the gold market, as lower rates reduce the opportunity cost of holding non-yielding assets like gold.

Praveen Singh, Associate VP at Sharekhan by BNP Paribas, highlighted that US yields remain firm, with ten-year yields hitting fresh cycle highs, signalling continued fiscal challenges in the US economy.

Despite these pressures, gold remains supported, with bulls eyeing $2,800 per ounce in the near term.

What should buyers do?

Monitor key economic indicators

Jateen Trivedi, VP at LKP Securities, advises buyers to keep an eye on the US Initial Jobless Claims report and other economic indicators. If jobless claims remain low, signalling a stronger US economy, it could lead to profit-booking in gold.

In such a scenario, domestic prices may retrace towards support levels of ₹77,000 to ₹77,500 per 10 grams.

Upside potential

Despite potential short-term corrections, Trivedi emphasised that as long as gold stays above these support levels, the overall trend remains bullish.

He identified resistance at ₹79,000 per ounce in India, and a breach of this level could signal further gains.

Is gold a safe bet for investors?

Given the global geopolitical landscape and economic uncertainties, gold continues to serve as a safe-haven asset.

For long-term buyers, experts suggest that current prices still offer potential for gains, especially with predictions of further hikes in 2025.

However, short-term traders should be cautious and watch for key economic data that may trigger volatility in the market.