Gold prices are rising steadily due to these 5 reasons. Is this the right time to invest in gold?

Gold prices are consistently breaking records. The rally continues due to strong macro and geopolitical factors. On Wednesday, gold reached a record high of ₹1,14,179/10 grams on the MCX (Multi-Commodity Exchange). Meanwhile, on Tuesday, gold prices jumped ₹2,700 to ₹1,18,900/10 grams in the Delhi bullion market. Over the past five years, the COVID-19 pandemic, the Russia-Ukraine war, US taxes, and other geopolitical issues have impacted gold prices in India and globally. Despite the price rise, there has been no decrease in gold demand.

5 Major Reasons for Gold's Rise
Gold prices have been on a long-term rally. Ajay Kedia, MD of Kedia Advisory, explained that US Fed easing, ETF investments, central bank purchases, and geopolitical risks have created a strong foundation for gold's record-breaking rally. Over the past year, gold prices have risen by more than 50%, supported by the weakening rupee.

Expectations of a US interest rate cut: Expectations of a significant US rate cut have boosted gold's position as a safe-haven investment. Federal Reserve Governor Stephen Mirn has warned that current monetary policy is tight, posing a threat to the job market.

Investor confidence: According to the CME FedWatch tool, there is a 90% chance of an interest rate cut in October and a 73% chance in December. Expectations of lower interest rates have increased gold's appeal as a non-yielding asset.

Geopolitical tensions: Geopolitical tensions have been a major driver of gold's rise. The Russia-Ukraine war and the Israel-Gaza war have significantly increased tensions in recent times. NATO's announcement to take action against Russia's violation of Estonian airspace also further supported gold prices.

ETF and Central Bank Demand: Central banks are continuously increasing their gold reserves. NDTV Profit reported that last week, ETF investments reached a three-year high, while central banks also purchased 63 tons of gold.

Changes in Demand: Seasonal weakness in the UK is now ending, leading to increased demand. In India, there is also demand due to festivals, but it is limited by rising prices. However, China's gold imports in August declined by 3.4% to 97.58 metric tons, indicating a slight decrease in physical demand.

Sell or Buy: What Should Investors Do?
Since 2020, gold prices have risen 20% annually in India and 17% globally. Investors have benefited significantly from the rising prices. Investors are now faced with the dilemma of whether they should sell, hold, or buy more gold. Ajay Kedia explained that looking at gold prices over the past five years, they have increased by approximately 112% compared to 2020. On September 19, 2020, the price of 24-carat gold was ₹51,619/10 grams, which is now ₹1,09,388.

Gold prices have risen by 1,200% in the last 20 years. In 2005, the price of gold was ₹7,638, which has reached ₹1,14,179 by 2025. Gold has returned over 48% so far this year, making it a reliable investment option. He also stated that due to the risk-on environment, caution is advisable, as a technical decline of 8-10% or a time correction in gold cannot be ruled out.

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