Experts Predict Potential Decline in Gold Prices Following Akshaya Tritiya
Gold demand in India remains robust as prices soar past the historic threshold of Rs 1 lakh per 10 grams, coinciding with the upcoming Akshaya Tritiya festival. This auspicious occasion, celebrated for its association with prosperity, traditionally sees a spike in gold and silver purchases. Despite the high costs, consumer interest continues to thrive, driven by impressive returns on gold investments and a growing preference for lightweight and studded jewelry.
Strong Consumer Interest Amid Rising Prices
The allure of gold persists, even as prices reach unprecedented heights. Over the past two years, gold has delivered annual returns of 20-25%, fostering a sense of confidence among buyers. Rajesh Rokde, chairman of the Gem and Jewellery Council of India (GJC), highlighted that last year, gold was priced at Rs 72,000 per 10 grams during Akshaya Tritiya, while it was Rs 58,000 in 2023. This consistent growth has encouraged many to invest in gold, viewing it as a reliable asset. In 2024, India imported 802 tonnes of gold, an increase from 741 tonnes in 2023, indicating sustained demand despite escalating prices.
Jewelry retailers are preparing for a bustling season, with Saurabh Gadgil, chairman and managing director of PNG Jewellers, noting that the overlap of Akshaya Tritiya with the wedding season is likely to boost customer turnout. He anticipates strong sales for both new purchases and scheduled deliveries on the festival day. The rising gold prices have also led to increased interest in studded jewelry, with many customers opting to exchange old gold for new bridal ornaments.
Market Predictions and Future Outlook
Commodity analysts are cautiously optimistic about the future of gold prices, suggesting a potential pullback after the current upward trend. Ajay Kedia, director of Kedia Advisory, pointed out that while gold has yielded an impressive return of approximately 32% since the last Akshaya Tritiya, future returns may moderate to around 6-7%, aligning with inflation rates. Analysts predict that gold prices could cool down to the Rs 86,000–Rs 87,000 range in the coming months.
Kaynat Chainwala, AVP of commodity research at Kotak Securities, noted that recent fluctuations in gold prices on global markets are influenced by easing U.S. tariffs and improved investor sentiment. She emphasized that ongoing trade negotiations and forthcoming economic data will likely keep gold prices within a specific range. While further declines in prices cannot be ruled out, any escalation in trade tensions could provide renewed support for gold, prompting investors to remain vigilant.
Investment Strategies and Market Sentiment
Despite the cautious outlook, some analysts maintain a positive perspective on gold investments. Manav Modi, a senior analyst at Motilal Oswal Financial Services, advocates for a “buy on dips” strategy. He identifies key support levels for gold at Rs 90,000–Rs 91,000, with resistance around Rs 99,000. Long-term targets are projected at Rs 1,06,000, suggesting that there may still be opportunities for investors willing to navigate the market’s volatility.
As the demand for gold continues to rise, particularly during festive seasons, consumers and investors alike are keenly observing market trends. The interplay of global economic factors and local consumer behavior will play a crucial role in shaping the future of gold prices in India. With Akshaya Tritiya approaching, the focus remains on how these dynamics will influence purchasing decisions in the coming days.
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