Gold crosses Rs 77,000, experts project that silver could reach Rs 1 lakh this festive season

Gold and Silver prices are on an upward trajectory backed by firm demand, and the steam seems to remain till the end of this festival season.

In the current financial year, gold and silver prices have appreciated by nearly 10 and 24 per cent, respectively.

"From Indian perspective, with the customs duty cut in July, that has and will give a big boost to consumption of gold...We broadly foresee that the October-December quarter would be pretty strong. It's a good time for gold," Sachin Jain, Regional CEO, India, World Gold Council, told over the phone.

Gold prices are currently at around Rs 77,845 per 10 grams. At the start of the financial year, the prices were around Rs 68,700.

"For a rally, a correction in prices is also needed, which we are seeing now. ETF buying, central banks' buying, geopolitical tensions all are bull factors for gold," explains Ajay Kedia, head of Mumbai-based firm Kedia Advisory.

For silver, Kedia anticipates prices to march towards Rs 100,000 per kg in the near-to-mid-term.

"Industrial use of silver is increasing, such as for EVs and solar panels. Silver prices were unable to pick up because of the recession fears in certain countries. But in the past months, we have been seeing outperformance in silver," said Kedia.

Silver prices are currently around Rs 93,000 per kg, as against Rs 75,000 at the start of the current financial year.

Manoj Kumar Jain, Director - Head commodity and Currency Research, Prithvi Finmart, said he sees gold futures tasting Rs 77,000, and silver at Rs 96,000 in the near term.

"Usual market fundamentals are not working, and the bull run in the market is driven by post-Covid gold buying by central banks as part of de-dollarisation, besides heightened geopolitical tensions and rate cuts by various central banks. A reduced interest rate is also a positive for gold and other commodities," Jain said.

International gold prices have seen an "extraordinary" rise this year at about 40 per cent, versus its normal average of about 10 per cent, Jain added.

Colin Shah, MD, Kama Jewelry, and former Vice Chairman Gem and Jewellery Export Promotion Council (GJEPC), said that the demand for gold is expected to be robust with the onset of festive season.

"The key drivers behind the stellar performance of gold is the beginning of a rate cut cycle in the US, followed by strong anticipation for further rate cuts in the upcoming meetings. The geopolitical tensions between Israel and Lebanon are also pushing gold prices up," said Shah.

International gold prices are currently testing the USD 2700 levels per ounce, and Shah's expectation is that it may touch USD 3,000 levels. In domestic market, he expects prices to cross Rs 78,000 in the medium to long-term.

Pranav Mer, Vice President, EBG - Commodity and Currency Research, JM Financial Services Ltd, also painted a similar picture. Mer said the bullion is likely to remain supported by safe-haven demand, buying among ETF investors.

"On chart... trend remains positive till support at 75850/ 75500 holds, while on the upside resistance is seen at 76550 (for Dec. futures)," Mer added.