Gold prices jumped to record levels on Dec 24, sending shares of gold‑lending companies soaring.
Gold hits lifetime highs
Gold futures on the MCX reached new all‑time highs: ₹1,38,676 per 10 g for February contracts, ₹1,42,125 for April and ₹1,45,579 for June.
Spot gold also rose sharply as geopolitical tensions and U.S. military moves in the Caribbean heightened safe‑haven demand.
Gold‑financier stocks surge
Shares of major gold‑financing firms climbed:
- Manappuram Finance up 6 % to a 52‑week high of ₹313.8.
- IIFL Finance up 4 % to ₹597.70.
- Muthoot Finance up more than 2 % to ₹3,890.
The higher gold price lifts the value of the collateral these lenders hold, reducing the risk of borrowers defaulting.
Drivers behind the rally
- Escalating geopolitical risks, especially tensions involving Venezuela.
- Expectations that the U.S. Federal Reserve will keep cutting rates, which helps non‑yielding assets like gold.
What investors should watch
Rising gold prices can benefit companies that lend against gold, but they also reflect broader market uncertainty. Keep an eye on:
- Further Fed policy moves.
- Geopolitical developments that may boost safe‑haven demand.
- The performance of gold‑financier stocks relative to the overall market.
Disclaimer
Remember, this is perspective, not a prediction. Do your own research and consider your risk tolerance before making any investment decisions.