Gold rate today: Gold prices have risen over 12% so far in this month with its rally receiving a fresh boost from the US Treasury’s unexpected intervention in the bond market last week.
On Thursday, gold climbed back above $4,600 an ounce as investor attention shifted to the Federal Reserve’s interest-rate outlook ahead of the annual Jackson Hole gathering. The precious metal gained as much as 1.1%, recovering most of the losses it had incurred in the previous session.
Meanwhile, back home, MCX gold October futures rose 0.28% to ₹1,60,108 per 10 grams.
What’s driving the rally in gold prices?
Gold prices climbed after the US Treasury announced plans to expand buybacks of older long-term bonds, reigniting concerns over dollar debasement.
Meanwhile, remarks by Warsh at the annual Jackson Hole symposium in Wyoming on Friday will be closely monitored for further cues on the interest-rate outlook.
According to the CME FedWatch Tool, markets are pricing in a 36.1% probability of a US rate hike in September, with the likelihood rising to 72.1% by December.
Data released on Wednesday showed that annual U.S. inflation remained unchanged in July and continued to stay well above the Federal Reserve’s 2% target. The unexpected halt in the decline from the recent peak triggered by the Iran war is likely to fuel further debate among policymakers over whether interest rates should be raised or kept unchanged.
On the geopolitical front, Qatar’s prime minister is set to visit Tehran in an effort to revive diplomatic engagement after the U.S. and Iran exchanged accusations over Washington’s plans to step up economic pressure on Tehran.
Gold is widely regarded as a safe-haven asset during periods of geopolitical and economic uncertainty. However, higher interest rates can weigh on its appeal, as the non-yielding asset does not generate interest income.
Is it right time to buy gold?
Kaynat Chainwala, AVP – Commodity Research, Kotak Securities, believes spot gold’s recent move to three-month high of $4,694/oz reflects investors increasing exposure to hard assets amid concerns over fiscal policy, monetary-policy uncertainty and currency debasement risks. While long-dated Treasury yields have only eased moderately from recent highs and remain a headwind for gold, a softer dollar, renewed ETF inflows and continued physical demand from China are supporting the broader uptrend.
“However, a sustained move towards $5,500/oz in the immediate term is not yet our base case. That would likely require a clearer shift towards Fed easing, a sharper and sustained decline in the US dollar, or renewed concerns over US fiscal credibility and bond-market stability. For now, the macro backdrop remains constructive for gold and further upside cannot be ruled out, but the path is likely to be volatile rather than a straight-line move to new record highs,” said Chainwala.
According to Hareesh V, Head of Commodity Research, Geojit Investments Limited, gold prices may continue to maintain a broadly positive bias, supported by safe-haven demand amid geopolitical tensions involving Iran and developments across Asia. However, a move toward the $5,500 level appears unlikely in the immediate future.
Hareesh further explained that near-term price action could remain volatile due to key US economic data, Federal Reserve signals, and fluctuations in the US dollar. However, domestic gold prices have recently corrected from recent highs against overseas market prices, amid expectations that the government may consider revising the gold import duty from the current 15%.
On the technical outlook, Aamir Makda, Commodity & Currency Analyst Commodity Technical Research, Choice Broking, said gold price has remained over 20 and 50-EMA on Weekly chart placed at 44378 and $4253 respectively. The dollar debasement narrative along with concerns about the US budget deficits, remains supportive of Gold’s positive outlook for medium term.
“Looking at Technical levels, Key resistance would be at $4895 and breakout of this level will lead Comex Gold spot towards $5000 – $5500 in upcoming weeks,” Makda said.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
