Key Points:
- Gold has shown a gain of more than 12% this year and is expected to continue due to geopolitical tensions, rate cuts, and concerns over major economies.
- The gold market is expected to benefit from a global economic downturn as investors seek safe-haven assets.
- Central bank demand has added 10% to gold’s performance this year and is expected to continue in 2024.
- The bullion market in India is experiencing an overbought scenario for gold, with prices expected to range from ₹57,500 to ₹65,000 in 2024.
- The gold loan market in India is anticipated to see an increase in loan volumes due to the demand for safe-haven assets and the rising value of gold.
- The gold loan market is estimated to grow at a CAGR of 15%-20% and is seeing advancements in technology, such as AI and data analytics, for improved risk assessment and loan approval processes.
The performance of gold has been impressive this year, with a gain of more than 12%. The demand for gold is expected to continue due to geopolitical tensions, rate cuts, and concerns over major economies. According to a report by the World Gold Council (WGC), gold’s performance has been bolstered by events such as the collapse of the Silicon Valley Bank and approaching elections in major economies like the US, EU, India, and Taiwan. Central bank demand has also contributed to gold’s performance, adding 10% to its value throughout the year.
In terms of the gold market, gold is often seen as a safe-haven asset, and in anticipation of a global economic downturn, investors’ need for portfolio hedges will increase, further fueling demand for gold. The WGC estimates that central bank demand will continue to support gold prices in the coming year. In India, which is the second largest gold-consuming nation in the world, factors such as a weak rupee, firm overseas prices, and steady demand from the physical and jewelry market are expected to push demand for gold in 2024, with prices ranging from ₹57,500 to ₹65,000.
The gold loan market in India is also expected to see growth in 2024. The demand for safe-haven assets and the increasing value of gold are driving this trend, particularly in rural areas where gold serves as a readily available source of credit. While 65% of the market remains unorganized, the gold loan market is estimated to grow at a CAGR of 15%-20%. The sector is also seeing advancements in technology, with the rise of fintech companies leveraging AI and data analytics for improved risk assessment and a streamlined loan approval process. The entry of new players is expected to accelerate this transformation in the gold loan market.
Overall, the outlook for India’s gold market in 2024 remains positive due to rising prices, the safe-haven appeal of gold, and increased demand from central banks. The gold loan market is set for further growth, driven by technological innovation, government initiatives, and the sustained increase in per-gram gold rates.
