Gold vs stock market: That Diwali 2024 is fast approaching, investors are busy finding investment options to maximize the return on their money. As gold has remained a traditional investment option, it would be interesting to know that in the last year, gold prices have risen from ₹60,282 per 10 g at ₹78,577 per 10 grams, registering over 30% growth over Diwali 2023. Also Nifty 50 the index increased by more than 28%. So, since Diwali 2023, both stocks and gold have given investors excellent returns, making it difficult for new investors to take an investment decision in Diwali 2024.

Conformable market experts, both assets are expected to generate stellar returns. Geopolitical tensions are expected to fuel gold prices, while easing monetary policy and the US presidential election will see FII inflows into the Indian equity market. They said they also expect a recession in China to fuel the precious metal.

Triggers for the gold price to rise

On what fed gold prices and the Nifty 50 index over the past year, Sugandha Sachdeva, founder of SS WealthStreet, said: “Ongoing geopolitical conflicts, particularly in the Middle East, along with the Federal Reserve’s pivot to monetary easing and the potential for further interest rate cuts, have strengthened the appeal of gold of refuge. The tight US presidential race is adding to the uncertainty in financial markets, while rising US debt levels and geopolitical risks are pushing more investors into gold as a hedge, particularly emerging markets increasing their gold holdings, and ETF inflows have increased over the past two months, further strengthening demand.”

Indian stock market triggers

On what has fueled the Nifty 50 and other stock indices, Sugandha Sachdeva said, “The strong performance of the Nifty 50 this year can be attributed to several variables: portfolio-led inflows, resilient domestic growth, strong retail participation, rising earnings and robust consumer demand. India. has been an attractive destination for foreign investors due to its political stability, currency stability and robust growth compared to other emerging markets. The US Fed fueled gains in global equities including the Nifty in September, pushing it to new highs.”

Talking about the outlook for India’s stock market, a SS WealthStreet expert said, “Nifty 50 is facing a cyclical downtrend driven by several external headwinds – continued selling by foreign investors, reduced earnings and funds diverted to China following measures their recent stimulation. . This downward trend could continue in the next quarter, influenced by escalating geopolitical risks, global liquidity changes and potential changes in US economic policies after the presidential election. However, after a time-based and price-based correction, domestic stocks are expected to attract fresh buying interest. The global and domestic easing cycle is likely to persist till 2025 and the RBI is also expected to cut rates, creating opportunities for a rally in the Nifty. Once geopolitical risks subside, foreign inflows into Indian equities could pick up again, driving the Nifty towards the 27,500 mark by Diwali 2025.”

Gold vs Stocks: Which is Better?

Anuj Gupta, Head of Commodities and FX at HDFC Securities, said on which asset to watch in Diwali 2024: “Both assets are expected to deliver stunning returns in the coming year, but a timely profit booking will be a factor important which While the easing of monetary policy and the geopolitical crisis would support the rise in the price of gold, the clarity of the economic policy in the US would fuel the equity markets. “

On the gold price outlook, Sugandha Sachdeva said: “Gold’s momentum is expected to continue in the first half of 2025, with prices potentially reaching ₹84,000 per 10 grams and $3,000 per ounce after a brief correction likely later in 2024. However, profit-taking could emerge by next Diwali, pulling prices back to ₹74,000 to ₹72,000 per 10g range. However, the broader gold trend remains bullish as global uncertainty, inflationary pressures and central bank actions continue to support its gains.”

Disclaimer: The views and recommendations above are those of individual analysts, experts and brokerage firms, not Mint. We advise investors to consult certified experts before making any investment decisions.