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| June 17, 2024

Will Gold Prices Hit Rs 70,000 by 2024?

Gold has been a timeless metal treasured for centuries for its beauty, durability, and enduring value. Throughout history, it has consistently proven itself as a hedge against economic uncertainties and inflation, making it one of the safest and most valuable investments for many people. Looking at the past and current market trends, gold shows a consistent upward trend in its prices.

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In the year 2024 itself, the value of gold has been projected to hit Rs.70,000/- Thus, now, more than ever, could be an opportune time to invest in gold and leverage its value for financial benefits such as a gold loan.

Factors Contributing to the Rise in Prices of Gold

Global Inflation

As economies worldwide grapple with inflation, gold often becomes a safe haven for investors. Unlike paper currency, gold retains its value over time. If inflation remains steadfast throughout 2024, the purchasing power of money may decrease, with gold prices appreciating, making it a valuable asset to hold.

Geopolitical Tensions

The geopolitical landscape influences market stability, and gold is perceived as a refuge against these uncertainties. Conflicts like the Ukraine-Russia war and the Israel-Hamas tensions have created uncertainty in global markets. During such times, investors will soon flock to gold, driving up its price.

Weakening of the Rupee

For Indian investors, the weakening rupee also plays a significant role. As the value of the rupee declines against the dollar, gold prices in India rise. Thus, if the Indian rupee depreciates in 2024, it could lead to a higher domestic price for gold.

RBI's Gold Purchases

The Reserve Bank of India (RBI) has been known to strategically purchase gold from time to time, especially during the financial crisis, in order to diversify its reserves and mitigate risks associated with fluctuations in the currency value. This periodic purchase of gold has been increasing in the past few years, which may hint towards volatility in US treasuries in the near future. Further, RBI has recently shifted its reserve of over 100 tonnes from the UK to India signalling a shift in the RBI's strategy for managing its gold reserves.

Suggested Read: Top Reasons Why Gold Prices Are Increasing In India

Impact of Rising Gold Prices on Gold Loans

As gold prices soar, the implications for those who wish to avail a gold loan are significant. Here is how a rise in price of gold affects your gold loan:

Increased Loan-to-Value (LTV) Ratios

Higher gold prices mean higher valuations for your gold loan. This translates to an increased Loan-to-Value (LTV) ratio, meaning you can borrow more money against your gold. For example, if gold prices rise by 10%, the amount you can borrow against the same quantity of gold increases accordingly.

More Attractive Loan Terms

With gold appreciating, it may also attract more favourable terms on gold loans. This could include lower gold loan interest rates, making it a more accessible borrowing option. Borrowers may also be able to benefit from lower EMI (Equated Monthly Instalments) and extended loan tenures.

Suggested Read: What Is The Impact Of Gold Rate On Gold Loan

Calculating Your Gold Loan

Before availing a gold loan, it is crucial to gain the necessary information about your gold loan. Calculating the amount you can borrow against your gold is straightforward with a gold loan calculator which calculates the interest as well as the loan amount. This tool provided by Muthoot Finance considers the weight and purity of your gold along with current market prices to estimate the loan amount. Once you have done that, all you have to do is enter the loan amount and the tenure, and the gold loan calculator will estimate the interest you have to pay.

Gold Loan Interest Rates

Gold loan interest rates can vary based on the lender, loan amount, and tenure. However, they are generally lower compared to unsecured loans. Since gold is viewed as a secured asset, the interest rate for a gold loan is also less. Muthoot Finance offers some of the lowest interest rates as compared to other lenders, along with full transparency about the terms and conditions, and any other charges.

Why Choose Muthoot Finance for Your Gold Loan?

Muthoot Finance is a leader in the gold loan industry, offering the best gold loan schemes with low interest rates. Our streamlined application process, along with our Loan@Home facility makes it simple to apply for a gold loan, with minimal paperwork and quick disbursement. Further, we provide flexible repayment plans tailored to your financial situation, making it easier to manage your loan. Get in touch with us today to unlock the true value of your gold.

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