Gold prices have been on a steady rise since the Federal Reserve cut interest rates on September 18. As of Wednesday at 8:20 a.m., gold rates in India reached ₹75,420 per 10 grams, reflecting the ongoing bullish trend. Meanwhile, international gold prices are nearing record highs, currently standing at approximately $2,664 per ounce, according to Bloomberg. On September 23, the yellow metal was trading at ₹74,492, marking an increase of 0.46%, as it continues to set successive record highs.
Will Prices Pause After the Rally?
With gold reaching unprecedented levels, questions arise about the potential for a price correction. Analysts are expressing a mix of caution and optimism regarding the gold market. Navneet Damani, Head of Research for Commodities and Currency at Motilal Oswal, noted, “If the trend of rate cuts continues, prices could continue to surge. However, we may see a pause around the $2,700 mark.”
Damani added that while current market exuberance is palpable, it’s challenging to predict when a pause might occur. “It might go a couple of percent higher before it takes a break,” he explained.
Long-Term Price Outlook
While the short-term trajectory remains uncertain, analysts maintain a positive long-term outlook for gold. “The impact of rate cuts and heightened geopolitical tensions suggests that the dollar index may decline again. This price surge has been driven by safe-haven buying,” stated Vandana Bharati, Head of Commodity Research at SMC Global.
Bharati also highlighted that data shows an increase in buy positions among non-commercial speculators and other market participants. She does not foresee significant corrections in the near future, saying, “People will continue to buy gold, especially with a resurgence in ETF purchases after a period of stagnation.”
In summary, while gold futures are at all-time highs and the short-term outlook may seem uncertain, long-term demand remains strong as investors seek refuge in the precious metal amid economic fluctuations.
