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Gold Prices Hover Near Three-Week Low Ahead of Dhanteras: Check City-wise Gold Rates and Its Impact on Diwali Celebrations

As Dhanteras, an auspicious Indian festival for gold purchases, approaches, gold prices are on a downward trajectory, creating anticipation and uncertainty among investors. The initial surge in safe-haven demand, fueled by the Middle East conflict, is fading, and all eyes are now on comments from US Federal Reserve Chair Jerome Powell, who might provide more clarity on interest rates.
This article explores the current state of gold prices, the factors influencing them, and the investment considerations as Diwali celebrations near.

Gold Prices Continue to Slide

Just one day before Dhanteras, the price of gold remains near a three-week low, signaling a 0.1% decline in spot gold, trading at $1,948.39 per ounce. In the US, gold futures have also fallen by 0.2%, settling at $1,953.50. In India, MCX gold futures for December 5 recorded a 0.18% decrease, down ₹111, reaching ₹59,898 per 10 grams, trading within the range of ₹59,890 to ₹59,903.

The Trigger - Fed's Impact on Gold

Federal Reserve officials have been making statements throughout the week, emphasizing their focus on economic data and the impact of rising long-term bond yields. Jerome Powell refrained from commenting on monetary policy or the economic outlook during a conference on Wednesday. City Index senior analyst Matt Simpson suggests that Powell will likely maintain the "higher-for-longer" narrative to avoid signaling potential cuts, which could impact gold prices negatively.

The Outlook and Investment Recommendations

Rahul Kalantri, VP Commodities at Mehta Equities, anticipates volatile gold prices in the short term, with support levels at $1940-1928 per ounce and resistance at $1964-1975 per ounce. In Indian rupees, support is at ₹60,000-59,770 per 10 grams, and resistance at ₹60,510 and ₹60,690 per 10 grams. A study by Windmill Capital suggests that gold tends to trend higher in times of geopolitical uncertainty, with an average annual return of approximately 11% over the last two decades.

Naveen KR, Smallcase Manager and Senior Director at Windmill Capital, recommends diversified portfolios that include both gold and equity to offset poor equity performance during macro events or high inflation. Gold acts as a hedge against inflation, historically outperforming equities during such periods. Experts recommend allocating no more than 10% of a total portfolio to gold, whether in physical or digital form.

City-wise Gold Prices in Major Indian Cities

As of November 9, 2023, here is an indicative list of 24k gold prices (per 10 grams) in some major Indian cities:

  • Mumbai: Rs 62,160
  • Delhi: Rs 62,360
  • Chennai: Rs 62,280
  • Kolkata: Rs 62,525
  • Bengaluru: Rs 62,345
  • Hyderabad: Rs 62,265
  • Ahmedabad: Rs 62,280
  • Bhopal: Rs 62,450
  • Visakhapatnam: Rs 62,310
  • Jaipur: Rs 62,170
  • Lucknow: Rs 62,310
  • Coimbatore: Rs 62,360
  • Madurai: Rs 62,325

With Dhanteras approaching, the state of gold prices is closely watched by investors. The recent decline in gold prices, influenced by factors like the Middle East conflict and statements from Federal Reserve officials, raises questions about its impact on Diwali celebrations. As the festival season begins, investment considerations suggest a balanced approach that includes both gold and equity to safeguard against economic uncertainties and inflation.