Gold prices reached record highs on September 29, 2023, driven by a weakening dollar and rising expectations of US interest rate cuts before the end of the year. This surge was reflected in both international and domestic markets, with retail prices climbing sharply across major Indian cities.
MCX Gold Futures Hit New Heights
On the Multi Commodity Exchange (MCX), December gold futures soared to an all-time high of Rs. 1,15,590 per 10 grams before settling at Rs. 1,15,436, marking a 0.47% gain for the day. Silver futures also experienced significant increases, with December contracts reaching Rs. 1,43,968 per kilogram before stabilizing at Rs. 1,43,433, a rise of 1.09%. This rally in prices coincided with a drop in the dollar index, which fell by over 0.20%. The decline made gold more affordable for overseas buyers and boosted global demand.
Internationally, spot gold also achieved new heights, as markets anticipated a 90% chance of a US Federal Reserve rate cut in October and a 65% probability of another reduction in December, according to the CME FedWatch Tool.
Market Insights and Expert Commentary
Analysts remain optimistic about the medium-term outlook for gold despite short-term volatility. Manoj Kumar Jain, of Prithvifinmart Commodity Research, pointed out that gold has substantial support at Rs. 1,14,200 to Rs. 1,13,650 and resistance between Rs. 1,15,400 and Rs. 1,16,000. Silver is expected to find support near Rs. 1,40,400 to Rs. 1,39,100, with resistance close to Rs. 1,45,000.
In addition, Rahul Kalantri of Mehta Equities noted that international gold support lies between $1,830 and $1,810 per troy ounce, with resistance at $1,885 to $1,820. He suggested that price dips may present attractive buying opportunities for investors.
In Mumbai, the retail price of 24-carat gold rose to Rs. 11,640 per gram, an increase of Rs. 92 from the previous session. The price for 10 grams now stands at Rs. 1,16,400, reflecting a hike of Rs. 920. The 22-carat gold segment also saw gains, with one gram priced at Rs. 10,670, up by Rs. 85, while 10 grams traded at Rs. 1,06,700, an increase of Rs. 850.
In Chennai, 24-carat gold was quoted at Rs. 11,673 per gram, rising by Rs. 65, and Rs. 1,16,730 for 10 grams, reflecting a gain of Rs. 650. The price for 22-carat gold in the city reached Rs. 10,700 per gram, up by Rs. 60, while 10 grams climbed to Rs. 1,07,000, an increase of Rs. 600 compared to the previous session.
Future Outlook
Given the global uncertainties, a weakening dollar, and potential changes in US Federal Reserve policy, analysts suggest that short-term volatility in gold prices may continue. Nevertheless, the long-term trend for gold appears supported by safe-haven demand and easing monetary expectations. Traders are advised to approach their positions with caution, while longer-term investors may consider accumulating on price dips.