Tuesday 30 / April / 2024
Muscat: A Bangladeshi national Sirajul Islam thought of buying gold jewellery for his family members as he had planned to visit his home country during the Eid Al Fitr holidays.
But seeing the record-high prices of yellow metal, he postponed his purchase plan. Shocked at the rocketing prices, many expatriates like Sirajul, have postponed gold jewellery purchase for now. Gold prices have gone up by more than 17% in recent months, making many wonder, “Is it the time to buy gold?”
On Tuesday, 24-carat gold was priced at OMR30.35 per gram and 22-carat gold was selling at OMR28.80 per gram. On April 12, 2024, the yellow metal hit a new record when the 24-carat gold was sold at OMR30.700 per gram and 22-carat gold was selling at OMR29.15 per gram.
Gold appeal increasing
Najeeb K, Regional Head, Malabar Gold and Diamonds, said: “The sudden surge in gold prices is further testament to the value appreciating nature of the asset. With ease of access being one of gold’s most attractive features, anyone searching for a reliable store of value, be it a beginner or an experienced investor, need not think twice about investing in gold. Gold appeal is increasing manifold by the fact that unlike other investment avenues where the capital requirement is high, one can buy gold even with modest amounts.”
Anto Ignatious, Regional Manager, Joyalukkas Jewellery LLC, said: “As per current market conditions, the gold price is rising every day. Also, showrooms are flooded with customers due to the upcoming school vacation and festive seasons. In view of this, we are offering 10% advance pre-booking in jewellery purchase with the lowest gold rate.”
Gold prices have experienced a notable surge, with the yellow metal witnessing an increase of over 15% in the recent months.
A recent report from Goldman Sachs highlights that this surge is not solely driven by traditional factors, indicating a shift in the dynamics of the gold market.
The report underscores the significant role played by new incremental factors, particularly the surge in accumulation by Central Banks in emerging markets (EM) and increased retail buying in Asian markets have led to an increase in gold prices worldwide.
Despite expectations of fewer Federal Reserve rate cuts, strong growth trends, and record-breaking equity markets, gold has rallied by 17 percent over the past two months.
Analysts at Goldman Sachs note that the traditional fair value of gold, which typically correlates with real rates, growth expectations, and currency strength, does not fully explain the recent price movement. Instead, unconventional factors, supported by current macroeconomic policies and geopolitical tensions, have been pivotal in driving gold’s bullish momentum.
Moreover, the anticipation of potential Federal Reserve rate cuts later in the year, coupled with right-tail risks from the US election cycle and fiscal policies, further reinforces the positive trajectory of gold prices.
While the report outlines key measures that could potentially control gold’s bullish momentum, such as a peaceful resolution to geopolitical tensions, major emerging markets Central Banks’ gold buying programmes, and stabilisation in China’s growth concerns, the likelihood of significant impact in the near term remains low.
Overall, the report underscores the expectation for continued bullish momentum in gold prices, emphasising the evolving dynamics and the influence of unconventional factors in driving the precious metal’s value.
While the increase in gold prices is advantageous for gold owners, higher prices pose challenges for consumers, where gold holds cultural significance.
