Gold prices reached record highs on September 29, 2023, driven by a weakening dollar and heightened expectations of interest rate cuts by the US Federal Reserve before the end of the year. Retail prices in India also saw significant increases, reflecting the bullish trend in the global market.
Gold Futures on the Rise
On the Multi Commodity Exchange (MCX), December gold futures climbed to an all-time high of Rs. 1,15,590 per 10 grams before slightly retracing to Rs. 1,15,436, marking a rise of 0.47% for the session. Silver futures followed suit, with December contracts peaking at 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 bolstering global demand.
International spot gold also hit new highs, with current market conditions suggesting a 90% chance of a rate cut by the US Federal Reserve in October and a 65% probability of another cut in December, according to data from the CME FedWatch Tool.
Market Analysis and Predictions
Despite short-term fluctuations, analysts maintain a positive outlook for gold in the medium term. Manoj Kumar Jain, an analyst at Prithvifinmart Commodity Research, indicated that gold has substantial support around Rs. 1,14,200 to Rs. 1,13,650 and resistance at Rs. 1,15,400 to Rs. 1,16,000. Silver is expected to find support at Rs. 1,40,400 to Rs. 1,39,100, with resistance near Rs. 1,45,000.
Further analysis by Rahul Kalantri of Mehta Equities highlighted that international gold support lies between $1,870 and $1,860 per troy ounce, with resistance at $1,885 to $1,920. His insights suggest that any dips in gold prices could present attractive buying opportunities for investors.
Retail prices of gold in India have also surged. In Mumbai, the retail price of 24-carat gold increased to Rs. 11,640 per gram, up by Rs. 92 from the previous session, while the price for 10 grams reached Rs. 1,16,400, marking a rise of Rs. 920. The 22-carat segment also experienced gains, with one gram priced at Rs. 10,670, an increase of Rs. 85, and 10 grams trading at Rs. 1,06,700, a rise of Rs. 850.
In Chennai, 24-carat gold was quoted at Rs. 11,673 per gram, higher by Rs. 65, and at Rs. 1,16,730 per 10 grams, a gain of Rs. 650. The price for 22-carat gold reached Rs. 10,700 per gram, up by Rs. 60, with the 10-gram price climbing to Rs. 1,07,000, an increase of Rs. 600 compared to the previous session.
Looking ahead, analysts predict that ongoing global uncertainties and the anticipated US Federal Reserve policy adjustments will likely contribute to continued volatility in gold prices. Nevertheless, the long-term outlook for gold remains optimistic, supported by safe-haven demand and expectations of easing monetary policies. Traders are advised to approach their positions with caution, while longer-term investors may consider accumulating gold on dips to capitalize on potential future gains.
