Gold prices reached record highs on September 29, 2023, driven by a weakening US dollar and rising expectations for further interest rate cuts from the US Federal Reserve. This surge not only impacted international markets but also led to significant increases in retail gold prices across major cities in India.
Record Highs in Gold Futures
On the Multi Commodity Exchange (MCX), December gold futures climbed to an unprecedented Rs. 1,15,590 per 10 grams before settling slightly lower at Rs. 1,15,436, marking an increase of 0.47% for the trading session. Silver futures followed suit, with December contracts touching Rs. 1,43,968 per kilogram, eventually stabilizing at Rs. 1,43,433, a gain of 1.09%. The dollar index fell by more than 0.20%, making gold more affordable for international buyers and stimulating global demand.
International spot gold also set new records, as market analysts indicated a 90% probability of a US Federal Reserve rate cut in October, with a 65% chance of another reduction in December, according to data from the CME FedWatch Tool.
Expert Insights on Market Trends
Despite the volatility in the near term, analysts maintain a positive outlook for gold’s medium-term potential. Manoj Kumar Jain, a specialist at Prithvifinmart Commodity Research, highlighted that gold has strong support levels between Rs. 1,14,200 and Rs. 1,13,650 and resistance at Rs. 1,15,400 to Rs. 1,16,000. Meanwhile, silver is supported around Rs. 1,40,400 to Rs. 1,39,100, with resistance near Rs. 1,45,000.
Rahul Kalantri from Mehta Equities noted that international gold support is found at $1,730 to $1,710 per troy ounce, with resistance at $1,785 to $1,820. He suggested that price dips could present attractive buying opportunities for investors.
In Mumbai, the retail price of 24-carat gold rose to Rs. 11,640 per gram, an increase of Rs. 92 from the previous session. The price for 10 grams now stands at Rs. 1,16,400, up by Rs. 920. The 22-carat gold segment also experienced gains, with one gram priced at Rs. 10,670, reflecting an increase of Rs. 85, and 10 grams trading at Rs. 1,06,700, marking a rise of Rs. 850.
In Chennai, 24-carat gold was quoted at Rs. 11,673 per gram, higher by Rs. 65, while the price for 10 grams climbed to Rs. 1,16,730, a gain of Rs. 650. The 22-carat segment in the city reached Rs. 10,700 per gram, up by Rs. 60, with the price for 10 grams increasing to Rs. 1,07,000, marking an increase of Rs. 600.
Future Outlook for Gold and Silver
With global uncertainties prevailing, alongside a declining dollar and indications from US Federal Reserve policy, analysts predict continued volatility in the short term. Nonetheless, the long-term trend for gold is bolstered by safe-haven demand and easing monetary expectations. Traders are advised to approach their positions with caution, while long-term investors may find value in accumulating on price dips.
The current market dynamics underscore the intricate interplay between currency fluctuations and commodity prices, highlighting gold’s enduring appeal as a store of value amidst economic uncertainty.
