Gold prices have crossed the ₹1.11L mark in India
What's the story
Gold prices have crossed the ₹1.11 lakh per 10g mark in India today. This was driven by strong global cues and investor positioning ahead of key US inflation data and Federal Reserve officials' comments this week. On the Multi Commodity Exchange (MCX), December gold futures rose by ₹799 or 0.72%. The most actively traded contract for October delivery also gained by ₹761 or 0.69% to reach ₹1,10,608 per 10g.
International market
Spot gold hits record high
In the international market, spot gold rose by 0.2% to $3,691.53 per ounce while US December gold futures climbed by 0.6% to $3,727.40 an ounce. The metal had previously hit a record high of $3,707.40 per ounce. Experts believe that the strong performance of bullion prices is due to a dovish monetary policy and ongoing geopolitical tensions across the globe.
Rate influence
Fed's dovish stance boosts gold prices
The US Federal Reserve recently cut interest rates by 25 basis points and hinted at possible further easing. This has led to a surge in gold prices, with markets now looking forward to speeches from at least a dozen Fed officials this week, including Chair Jerome Powell. The upcoming US core Personal Consumption Expenditure (PCE) data, the central bank's preferred inflation gage, is also being closely monitored.
Market outlook
Analysts weigh in on gold's potential surge
Tim Waterer, Chief Market Analyst at KCM Trade, said "Gold is back on the doorstep of the $3,700 an ounce level and new highs could be reached this week if US macro data continues to support the dovish Fed narrative." Darshan Desai, the CEO of Aspect Bullion & Refinery, also weighed in on the matter saying, "With the auspicious beginning of Navratri, domestic markets may see some buying traction."
Factors
Rate cut expectations driving gold prices higher
Manav Modi, Analyst - Precious Metals at Motilal Oswal Financial Services, said gold's current strength is a mix of geopolitical tensions and Fed rate cuts. He also noted market expectations of rate cuts in October and December with probabilities of 93% and 81%, respectively.