Gold Prices Today | Yellow metal glitters on US Fed rate cut momentum: MCX above ₹75K, bullion up 29% YTD

Gold prices soared to fresh record highs on Wednesday, September 25, as expectations for another big rate cut by the US Federal Reserve bolstered bullion’s bull rally, and a softer US dollar added to the metal’s appeal. Comments from US Fed chair Jerome Powell and US inflation data due later this week have come into focus.

Spot gold last gained 0.4 per cent to $2,667.03 per ounce after hitting an all-time high of $2,670.43 earlier. US gold futures gained 0.6 per cent to $2,691.40. Back home, gold futures last traded 0.19 per cent higher at ₹75,148 per 10 grams after hitting an intraday high of ₹76,000 on the multi-commodity exchange (MCX). 

Also Read: Gold rate today: Yellow metal hits record high of ₹76,000. Can gold prices touch ₹80,000 by year-end?

Bullion has risen over 29 per cent so far in 2024, with gains attributed to the central bank easing and geopolitical issues. Spot silver last rose 0.1 per cent to $32.17 per ounce, reaching its highest levels since May. Platinum last added 1.2 per cent to $997.80 and palladium last shed 0.5 per cent to $1,051.75.

Gold hits fresh record high: What’s driving the yellow metal?

-The US dollar steadied to near 14-month lows against a basket of peers, making gold less expensive for overseas buyers.  The Fed cut rates by 50 basis points last week, and investors see about a 58 per cent chance of another 50 bps cut in November. Lower interest rates boost non-yielding gold’s appeal.

Traders await Fed Chair Jerome Powell’s remarks and US inflation data later this week for further policy cues. Analysts expect the $2,700 per ounce level in the next day or two in case of weakening labour and if the Fed presidents all reaffirm 50 basis point cuts.

Also Read: US Fed pivot in focus: Why are gold prices following US Treasury yield? — Explained

ETF flows and ancillary factors, including geopolitical tensions across the Middle East and China’s massive stimulus measures, have continued to support and drive gold prices higher over the last several weeks, especially in the last two sessions.

Where are gold prices headed?

Rahul Kalantri, VP Commodities, Mehta Equities Ltd: “Gold witnessed an impressive rally on Tuesday, breaking another record high, and silver wasn’t far behind, hitting its best level in nine weeks. People are rushing to these safe-haven metals as uncertainty continues to hang around. 

The charts also look bullish, so the speculators are jumping in. China also boosted the metals by cutting its key bank rate by 0.5 per cent, which provided a major boost to gold and silver. Meanwhile, the Israel-Hezbollah military conflict is heating up rapidly, thus fuelling safe-haven buying in gold and silver.

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Pranav Mer, Vice President, EBG – Commodity & Currency Research, JM Financial Services Ltd: “Gold’s bull run continues as prices hit another all-time high. Prices remain supported by a weaker dollar, an expectation of more rate cuts from global central banks, safe-haven demand, and the inflow of ETF funds. The chart trend remains positive, with support at 74,900/ 74,400. However, trade cautiously today, as we may see some profit-booking. “

Nish Bhatt, Founder & CEO, Millwood Kane International: “The bull run continues for the yellow metal, which attains fresh highs. Gold prices have risen over 28 per cent in the international market and over 19 per cent in the domestic market, whereas the gains for the Indian equity benchmark – Nifty have been nearly 19 per cent. Gold has outperformed most asset classes in CY24.

Gold has scaled fresh highs, with $2,700/oz in sight in the international market, whereas the ₹76,000 level has been attained in the domestic market. The rally in gold is due to a combination of factors; primarily, it is based on expectations of further rate cuts by the US Fed. This also implies the beginning of a rate-easing cycle after four years. Rates are expected to stay lower for longer from here on.

Also Read: Gold Prices Today: Yellow metal hits record-high at $2645/oz on US Fed rate cut, MCX above ₹74,900/10 gms

The expectation of lower rates has weakened the US dollar, making it more affordable. On the global front, geopolitical tensions in various pockets of the world have increased the appeal of the safe haven. Escalating tensions between Lebanon and Israel and higher buying by ETFs will keep the demand for gold higher in the short to medium term.”

Sandip Raichura, CEO – Retail Broking and Distribution, Director – PL Broking and Distribution: “With expectations of continued Fed rate cuts over the next couple of quarters—including a 50 basis point cut anticipated for the November meeting—the US dollar is likely to remain weak, which historically supports gold prices.

Additionally, geopolitical tensions, particularly the crisis in the Middle East and the ongoing Russia-Ukraine conflict are positively impacting gold. China has been aggressively accumulating gold at various price points since $2,200. After gold broke out of the $2,080 to $2,100 range, long-term projections suggest a target of around $2,900. 

In the very short term, however, a pullback may occur, with a near-term bottom expected at around $2,540. If that level is breached, the next critical support would be approximately $2,480. While this scenario could lead to a temporary downturn, it seems unlikely. We believe that after a potential correction of $60 to $100, gold will likely regain momentum and aim for $2,700 in the near future.”

Also Read: US Fed delivers supersized 50 bps rate cut: FPI inflows to stronger INR—here’s how the verdict is ‘good’ for India

Kaynat Chainwala, AVP-Commodity Research, Kotak Securities: “The US Conference Board’s Consumer Confidence Index fell sharply in September to 98.7, down from 105.6 in August, its largest decline in three years. Concerns over the labour market, with lower US Treasury yields and the US dollar nearing a 14-month low, further fueled the rise in gold prices. 

Fed Governor Michelle Bowman highlighted persistent inflation risks and advocated a cautious approach to rate cuts to avoid reigniting inflation. COMEX gold prices reached a record high of $2,694.89 per ounce and are expected to hold gains as the CME FedWatch Tool indicates a 62.2 per cent chance of a 50 basis point cut in November, up from just 29 per cent a week ago. Ongoing fears of an escalating Israel-Hezbollah conflict will likely enhance gold’s appeal as a safe-haven asset.”

Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities: “The recent surge in prices reflects strong momentum from previous sessions, with traders possibly pausing to consolidate gains. Continued focus remains on upcoming economic data, which could drive further price action. Support for gold in Comex is around $2,645-$2,652, while in MCX, support is near ₹75,000- ₹74,850.”