MCX gold rate today ₹2,645 away from life-time high. US Fed rate cut in focus

Gold rate today: After climbing to the five-week high, gold price slipped on Friday after the profit-booking trigger. The MCX gold rate for the February 2024 future expiry finished at ₹77,130 per 10 gm, ₹2,645 away from the lifetime high of ₹79,775 per 10 gm. In the international market, spot gold price finished at $2,648 per troy ounce, whereas the COMEX gold price ended at 2,675 per troy ounce.

According to commodity market experts, the MCX gold rate tested a weekly high of ₹79,120 per 10 gm, whereas spot gold prices touched a weekly high of $2,775 per ounce. However, it retraced from this five-week high after the profit-booking trigger.

What fueled gold prices to a five-week high?

On reasons that fueled gold prices this week, Sugandha Sachdeva, Founder of SS WealothStreet, said, “Gold prices surged sharply earlier in the week, testing highs of ₹79,120 per 10 gm and $2,725 per ounce—just shy of record levels, before succumbing to profit booking and relinquishing much of the gains towards the latter part of the week. The initial rally was fuelled by the US Federal Reserve’s rising expectations of further monetary easing for the third time this year, coupled with news that China’s central bank resumed gold purchases after a six-month hiatus, enhancing the metal’s safe-haven appeal. Elevated geopolitical tensions in the Middle East following the fall of the Syrian government and in Eastern Europe further boosted demand for gold.”

Pointing towards the safe-haven demand, Prithviraj Kothari, Director at IBJA, said, “Gold price is attracting some dip-buying Geopolitical risks, trade war fears and Fed rate cut bets. US-provided missiles have been fired by Ukraine, aiming for key locations far inside Russian territory. After a month of fierce battle, Russian forces are getting closer to Pokrovsk, a crucial city in eastern Ukraine. Israel declared this week that its forces would remain in the Syrian region it had captured until a new force was formed that satisfied its security requirements and filled the void left by the overthrow of the Syrian government.”

US Fed rate cut in focus

Speaking on the US Fed meeting scheduled next week, the Managing Director of RiddhiSiddhi Bullions, Prithviraj Kothari, said, “The US Fed may take a more cautious approach to lowering interest rates in the future, which is in line with views that US President Donald Trump’s expansionary policies will increase inflation. The lower-yielding yellow metal may be capped if expectations of a less dovish Fed continue to drive US Treasury bond yields and help the US dollar hold onto its weekly advances to a new monthly peak.”

“The US CPI data for November strengthened bets of an imminent rate cut by the US Fed at its upcoming meeting. However, the release of stronger-than-expected US wholesale price data for November, with the PPI rising above consensus estimates, raised concerns over persistent inflation. This tempered optimism for gold as it sparked speculation that the Fed might pause rate cuts in early 2025, strengthening the dollar index and weighing on gold prices,” said Sugandha Sachdeva.

The SS WealthStreet expert said that gold prices are expected to remain highly volatile, with the focus shifting to the outcome of the US Fed meeting and its guidance on interest rate cuts in 2025.

Gold price outlook

Expecting the safe-haven demands towards gold price to continue, Prithviraj Kothari of IBJA said, “Bulls may try to test the all-time high of ₹79775, which was reached in October, over the next significant barrier, which is estimated to be around the ₹79,000 region. Conversely, the ₹77,000 has become an instantaneous strong support. However, a decisive break below might lead to technical selling and more losses toward the ₹76,500 confluence.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.