Gold prices hit a fresh record high of levels above the Rs 1,14,000 mark driven by festive demand and safe-haven demand.
In India, the prices held steady at Rs 1,13,120 per 10 gm, according to the India Bullion Association, compared to Rs 1,14,360 on Wednesday.
Amit Gupta, senior research analyst, equity and commodity at Kedia Advisory cites that expectations of aggressive U.S. rate cuts have boosted safe-haven demand, with Governor Stephen Miran warning that policy is too tight and risks the job market.
The CME FedWatch tool indicates a 90% probability of a cut in October and 73% chance in December, reinforcing investor conviction. Lower interest rate outlook has enhanced gold’s appeal as a non-yielding asset.
Geopolitical tensions also supported bullion after NATO vowed measures against Russia’s violation of Estonian airspace. ETF inflows reached a three-year high last week, adding to institutional demand, said Gupta. Central banks resumed buying, with 63 tonnes added, aligning with post-2022 averages.
“Overall, a mix of expected Fed easing, ETF inflows, central bank purchases, and geopolitical risks has created a strong base for gold’s record-setting rally. In the past one year, we have already seen over 50% gain in gold prices, further supported by rupee weakness, making gold the best-performing asset class,” Gupta said.
However, with risk-on sentiment from here, it is advisable to watch carefully as a technical pullback or time correction of 8-10% in gold is can’t be ruled out, he added.
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