Gold prices reached unprecedented levels on September 29, 2023, driven by a weakening dollar and rising expectations for interest rate cuts by the US Federal Reserve. This surge was reflected in domestic markets, where retail gold prices climbed sharply across major Indian cities.
Record Highs on MCX
On the Multi Commodity Exchange (MCX), December gold futures soared to a record of Rs. 1,15,590 per 10 grams before settling slightly lower at Rs. 1,15,436, representing a gain of 0.47% for the session. Silver futures also experienced a significant rise, with December contracts peaking at Rs. 1,43,968 per kilogram and then stabilizing at Rs. 1,43,433, up by 1.09%. The dollar index dropped over 0.20%, making gold more affordable for international buyers and boosting global demand.
Internationally, spot gold reached new highs, with markets anticipating a 90% chance of a US Federal Reserve rate cut in October and a 65% likelihood of another reduction in December, according to data from the CME FedWatch Tool.
Expert Analysis and Domestic Prices
Analysts express optimism about gold’s medium-term outlook despite short-term fluctuations. Manoj Kumar Jain from Prithvifinmart Commodity Research noted that gold has robust support levels at Rs. 1,14,200-Rs. 1,13,650 and resistance between Rs. 1,15,400-Rs. 1,16,000. Silver’s support is around Rs. 1,40,400-Rs. 1,39,100, with resistance near Rs. 1,45,000. Rahul Kalantri of Mehta Equities highlighted that international gold support lies at $1,830-$1,810 per troy ounce, with resistance at $1,875-$1,820, indicating that declines in gold prices may present buying opportunities.
In Mumbai, retail prices for 24-carat gold reached Rs. 11,640 per gram, an increase of Rs. 92 from the previous session, while the price for 10 grams stood at Rs. 1,16,400, up by Rs. 920. The 22-carat gold segment also saw gains, with one gram priced at Rs. 10,670 and 10 grams at Rs. 1,06,700, marking an increase of Rs. 850. In Chennai, 24-carat gold was quoted at Rs. 11,673 per gram, higher by Rs. 65, while 10 grams traded at Rs. 1,16,730, a gain of Rs. 650.
As global uncertainties persist, along with shifts in US monetary policy, analysts suggest that short-term volatility in gold prices may continue. However, the long-term outlook remains bolstered by safe-haven demand and expectations of easing monetary conditions. Traders are advised to approach their positions with caution, while long-term investors may consider accumulating gold on dips.
