Festive Gold Rush: Is This The Right Time To Buy Gold Before Diwali?

Gold prices are glittering brighter than ever as the festive season approaches. With Diwali around the corner, many are wondering: Should I buy gold now or wait? According to market experts, 10 grams of 24-carat gold could touch Rs 1.25 lakh by Diwali 2025, up from the current level of around Rs 1,09,700. But the journey ahead depends on several key factors.

Why Gold Prices Are Rising

The recent rally is linked to the weakening of the US dollar. Typically, when the dollar falls, gold becomes more attractive to global investors, pushing prices up. However, if the dollar strengthens again, demand for gold could dip, leading to a correction.

The Federal Reserve Factor

All eyes are on the US Federal Reserve. A rate cut would make gold more appealing by reducing the returns on interest-bearing assets. But if the Fed delays or avoids a cut, gold prices may lose some shine.

The Rupee's Role

In India, the rupee is just as important. A weaker rupee makes importing gold costlier, which pushes up domestic prices. At present, this has worked in gold's favor. On the flip side, if the rupee gains strength, gold could become cheaper.

Global Tensions Keep Gold Hot

From the Israel-Gaza conflict to the Russia-Ukraine war, global uncertainties have boosted gold's safe-haven appeal. But if tensions ease, investors may shift to riskier assets like equities, which could cap gold's rise.

Will Consumers Buy This Diwali?

Traditionally, Diwali sparks a gold-buying spree in India. But with prices already high, some consumers may hold back. If demand slows, prices may stay steady-or even dip slightly-despite bullish global signals.

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