#GoldPrices #IndiaMarkets #Bullion #USFed #RateCut #SafeHaven #Commodities #Rupee #GlobalMarkets #Inflation #Investing #StockMarket #USJobsData
New Delhi — Gold prices scaled a new peak in India on Monday, September 1, with domestic rates climbing to an unprecedented ₹1.06 lakh per 10 grams. The rally comes amid a confluence of global and domestic factors, ranging from expectations of a US Federal Reserve interest rate cut to a sharp depreciation in the Indian rupee, which has intensified the impact of global price movements in the local market.
At the global level, gold hit a four-month high, buoyed by a surge in safe-haven demand as traders increasingly wager on the Federal Reserve easing policy this month. According to the CME FedWatch tool, market participants now estimate an 87% probability of a 25-basis-point rate cut in September, significantly higher than just a few weeks ago.
Fed Policy Bets Drive Global Rally
The prospect of lower interest rates has long been a catalyst for gold prices. As a non-yielding asset, gold becomes more attractive in a low-rate environment where the opportunity cost of holding it diminishes relative to interest-bearing assets such as bonds.
San Francisco Fed President Mary Daly’s recent remarks have only cemented this expectation. Despite US core PCE inflation—the Fed’s preferred gauge—holding steady in line with forecasts, Daly endorsed a “measured and reasonable” rate cut to prevent the economy from stalling. This dovish outlook has echoed across global markets, fueling bullish sentiment for bullion.
Adding another layer of support, the US dollar slipped sharply after a federal court deemed large portions of former President Donald Trump’s tariff regime as unconstitutional. The ruling has triggered fresh uncertainty over future US trade policies, further bolstering gold’s appeal as a safe-haven investment.
Rupee Weakness Amplifies Price Surge in India
While international gold prices have firmed, India’s bullion rates have surged at a faster pace due to the rupee’s steep depreciation against the dollar. On Monday, the Indian currency briefly touched a record low, undermined by concerns about the country’s widening trade deficit and persistent foreign outflows from equities.
The weakened rupee means higher import costs for India, which is among the world’s largest gold consumers. Analysts note that this magnifies the rally in global gold prices when translated into rupee terms.
“Gold prices surge globally and domestically, fuelled by escalating trade tensions. A weakening rupee adds to the momentum, pushing prices decisively into uncharted territory,” observed Rahul Kalantri, VP Commodities at Mehta Equities.
Kalantri highlighted that bullion has immediate technical support in the range of ₹1.02–1.03 lakh per 10 grams, while resistance is expected between ₹1.04–1.05 lakh per 10 grams. However, given the heightened volatility, he cautioned traders to watch global cues carefully in the weeks ahead.
Trade Tensions Add to Global Uncertainty
Beyond rate expectations, the geopolitical backdrop has further reinforced safe-haven demand. The US recently escalated tariffs on Indian exports, heightening trade frictions between the two countries. Many investors rushed to rebalance their portfolios by increasing allocations to gold, seen as a stable asset during periods of policy and trade disruptions.
Globally, similar dynamics are at play as governments and corporations brace for potential supply chain dislocations amid renewed frictions in global trade policies. Such factors often converge to propel gold higher, as witnessed in past episodes of economic and political turbulence.
Domestic Demand Remains Elevated
India’s domestic market sentiment is equally fervent. With the peak festival and wedding season approaching, demand for physical gold is expected to remain strong despite the elevated price levels. Jewelers, however, report mixed consumer behavior—while long-term buyers remain committed, casual or small-scale purchasers are holding back amid the steep rise.
Analysts caution that if gold maintains levels above ₹1 lakh per 10 grams, retail demand could slow temporarily, though investors will likely continue to view the metal as a hedge against financial uncertainty.
Eyes on US Jobs Data
All eyes are now on the upcoming non-farm payrolls data from the US, scheduled for release on Friday, September 5. This economic indicator is regarded as a key determinant of the Federal Reserve’s monetary stance. A strong employment report could temper expectations of an aggressive rate cut, while a weaker-than-expected reading may solidify the market’s conviction, pushing gold even higher.
Outlook: Can Gold Go Higher?
With global macroeconomic currents in flux, experts believe the upside momentum for gold is far from over. Any further rupee depreciation or dovish turn in US monetary policy could propel prices even higher. However, sharp corrections cannot be ruled out, given the swift pace of the current rally.
For now, investors and consumers will be closely watching currency trends, geopolitical developments, and especially the Fed’s policy signals over the coming weeks. What is certain, however, is that gold has firmly reclaimed the spotlight as the world navigates through economic uncertainty.
Key Highlights:
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India gold price: ₹1.06 lakh/10 gm (all-time high)
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Global gold: Four-month high
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Fed rate cut bets: 87% chance of 25 BP cut in September
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Rupee: Record low against USD, boosting domestic prices
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Technical levels: Support at ₹1.02–1.03 lakh, Resistance at ₹1.04–1.05 lakh
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Next big event: US Non-farm payrolls data on Sept 5
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#GoldPrices #IndiaMarkets #Bullion #USFed #RateCut #SafeHaven #Commodities #Rupee #GlobalMarkets #Inflation #Investing #StockMarket #USJobsData #TariffWar #EconomicOutlook #PreciousMetals
