Last year, there was a sudden decline in gold prices after the budget, but this time the situation seems to be the opposite. It is possible that this time after the budget on February 1, gold prices may rise sharply. It is even being estimated that the gold price may go up to Rs 85,000 per 10 grams this year. Which will be the highest level till date.
Last but not least, why gold prices may rise?
The biggest reason for the rise in gold prices is that this time the government can increase the import duty in the budget. Finance Minister Nirmala Sitharaman had reduced the import duty from 15 percent to 6 percent in the budget last year. According to the Gems and Jewelery Export Association, the import duty on gold import had increased by 104 percent in August 2024. In fact, when gold became cheaper after the budget last year, the demand suddenly increased. Due to high import of gold, the burden on the government treasury has also increased. It is very important to take this step to control fiscal deficit.
geopolitical tension
America’s new President Donald Trump has taken over the responsibility and after that he took some such big decisions which seem that geopolitical tension is going to increase in the coming days. As soon as Trump formed the government, he withdrew from the Paris Climate Agreement and WHO. Apart from this, Trump has also indicated to adopt a tough attitude towards BRICS countries. There is every possibility that the situation may worsen in the coming days. And all these ups and downs will affect the gold price.
Effect of rate cut on gold
The US Fed had decided to reduce the policy rate in the last meeting. In the December 2024 meeting, the Federal Reserve had reduced the interest rate for short-term loans by 25 basis points (0.25%) to the range of 4.25-4.5 percent. Earlier it was between 4.5-4.75 percent. It is possible that the Fed may reduce the rates in its next meeting also, due to which gold prices may increase further.
Gold becomes costlier due to weak rupee
The rupee has been continuously weakening against the dollar for the last few months. On January 22, the price of one dollar is at the level of 86.26. If the value of rupee decreases in the coming days, you may have to spend more money for gold import. Due to this, gold may become expensive in India and the burden of government expenditure will also increase.
Yogesh Singhal, Chairman of All Bullion and Jewelers Association, said, “Along with gold, purchases in gold ETFs are also increasing. Due to increased demand and weak rupee, this year the price of gold can go up to Rs 85,000 per 10 grams.” Is. “