Gold rate outlook: Prices may consolidate; but Fed rate-cut hopes keep bias positive, say analysts
Gold prices are likely to trade in a consolidation zone in the near term, but analysts maintain the broader bias remains positive as expectations grow for a US Federal Reserve rate cut in September.Traders will keep a close eye on upcoming US macro data, including Q2 GDP, PCE inflation, and speeches by Fed officials, which will shape the monetary policy outlook and influence bullion sentiment, according to analysts, PTI reported.“Gold prices may continue to see some consolidation, but the bias is expected to remain positive. The US Federal Chair Jerome Powell’s comments have raised expectations of an interest rate cut at the September meeting,” said Pranav Mer, Vice President, EBG – Commodity & Currency Research, JM Financial Services. He added that investors will also track geopolitical and trade developments, including “Russia-Ukraine peace progress and the implementation of additional tariffs on India from August 27 over its Russian oil purchases.”Last week, gold regained the Rs 1 lakh mark on the Multi Commodity Exchange, rising Rs 956 or 1 per cent to Rs 1,00,391 per 10 grams. The gains came on strong buying interest after Powell’s Jackson Hole remarks, which hinted at a potential shift in monetary policy and the first rate cut since December.The Federal Reserve’s policy-setting meeting is scheduled for September 16-17. Powell, however, also noted that officials could still consider delaying a cut if tariffs imposed by President Donald Trump significantly push up domestic prices.According to Prathamesh Mallya, DVP – Research, Non-Agri Commodities and Currencies, Angel One, gold had been correcting in recent weeks due to lack of triggers, but Powell’s comments provided fresh momentum. “The chances of a September rate cut and a further cut later in the year are now significantly higher. This allowed for a sharp move in MCX gold as traders looked to benefit from cheaper prices after the dollar weakened,” he said.Mallya added that uncertainty continues to linger, with the Russia-Ukraine peace process facing hurdles and Trump-era tariffs creating a “never-ending” overhang.In international trade, Comex gold futures for December delivery rose 1.09 per cent on Saturday to settle at $3,418.50 an ounce, reflecting renewed investor optimism.Manav Modi, Analyst – Precious Metals, Motilal Oswal Financial Services, said gold began last week on a weak note as easing geopolitical tensions and shifting monetary expectations weighed on sentiment. “Some easing was sparked by news that US tariffs on Swiss gold were reversed after the White House clarified the reports were false, leading to a retreat in prices,” Modi said.He added that rupee volatility and a stronger dollar capped the metal’s upside in the domestic market, while softer Chinese inflation data dragged industrial metals lower.Analysts said the near-term outlook for gold will be shaped by a mix of US economic data, progress in Russia-Ukraine talks and clarity on tariffs. While some bouts of consolidation are likely, the broader trend is expected to stay firm as monetary easing hopes strengthen.
