Safe-haven demand, weak rupee and Fed cut hopes push gold to new highs
Chennai: Gold prices touched a new high of Rs 1,05,600 per 10 gm in the Delhi spot market on Friday as rising international rates got support from the weaker rupee. Gold has gained 34 per cent since the beginning of the year.
Gold price in the Multi Commodity Exchange too saw a new high of Rs 1,02,600 per 10 gm as gold in the international market hovered around $3,410 per ounce on Friday, marking the best performance since April. Since the beginning of the calendar year, gold has gained 33.96 per cent in rupee terms, while silver at Rs 117,825 per kg has given returns of 35 per cent. On the other hand, Sensex has gained 2.13 per cent.
Safe-haven demand and weakness in the dollar helped gold move closer to its record high levels. According to Kedia Commodities, the fresh attacks on Ukraine by Russia has cast shadows over the possibility of a ceasefire uncertainty and the Russian response to the tariff war too has not been as per the calculations by the US.
The stock markets have been cautious ahead of the US inflation data to be released on Friday. “Traders are watching the PCE price index later today, expected to show faster inflation, following revised data that showed the US economy grew slightly quicker in Q2,” said Ajay Kedia, MD, Kedia Commodities.
Further, investors remain focused on the Federal Reserve’s next move, with political pressure fuelling expectations of accelerated easing. Markets have now almost fully priced in a 25 basis points cut in September. Fed Governor Christopher Waller reinforced dovish sentiment, stating he “fully expects” cuts to begin next month to move policy closer to neutral.
In the Indian market, the weakness in rupee aided the gold prices, which made fresh highs. Rupee saw an all-time low of 88.15 against USD on Friday.
In the MCX, gold has an immediate resistance of Rs 1,03,500.
