Gold prices experienced a notable fluctuation today, after hitting a new record high of ₹1,06,666 per 10 grams on the Multi Commodity Exchange (MCX). However, following this peak, prices retraced approximately 0.50%, largely influenced by a rebound in US dollar rates following the Federal Reserve’s recent decision to cut interest rates by 25 basis points.
Despite this brief downturn, the MCX gold rates marked their fifth consecutive week of gains. The gold futures contract for October 2025 concluded last week at ₹1,09,900. On the international front, COMEX gold prices climbed to an impressive $3,707.65 per troy ounce last week, marking a significant milestone in the market.
Experts indicate that while gold prices typically rise after a Federal Reserve rate cut, this trend was not observed last week due to the resurgence of the US dollar. Nonetheless, there was observable value buying at lower price points, allowing gold to recover after its slight decline. Analysts predict that MCX gold could see prices escalate to ₹1,12,000 per 10 grams, with COMEX gold potentially approaching $3,750 per troy ounce.
Sugandha Sachdeva, Founder of SS WealthStreet, commented on the week’s performance, highlighting not only the record domestic price but also the international milestone. She pointed to the Federal Reserve meeting as a critical event, where the Fed’s signaling of additional rate cuts revealed its response to signs of a cooling labor market, traditionally beneficial for gold as it lessens the opportunity cost of holding the non-yielding asset.
The dynamics surrounding the recent rate cut were described as a classic “buy the rumor, sell the fact” scenario. Traders had already priced in the 25 bps reduction, leading to profit-taking actions that exerted selling pressure on gold. Puneet Singhania, Director at Master Trust Group, elaborated that while gold usually flourishes during rate-cutting cycles amid high inflation, the immediate impact was muted due to profit realization by traders.
According to Ross Maxwell, Global Strategy Lead at VT Markets, the Federal Reserve’s cautious stance and emphasis on data dependency suggested any future rate cuts would be gradual, contributing to fluctuations in gold prices. Additionally, a rebound in the USD and rising US Treasury yields further tempered expectations for gold, which traditionally moves inversely to these factors.
Despite the short-term challenges, renewed buying was evident following the Fed’s rate cut announcement, driven by anticipation of further easing measures and sustained central bank purchases. Analysts suggest that ongoing concerns over the independence of the Fed are also supporting gold prices.
Looking ahead, market observers remain bullish on gold’s long-term outlook. Factors such as slowing US growth, inflation risks, and continued central bank demand are seen as positive indicators. However, potential downside pressures exist, particularly if rate cut expectations are pushed back or if economic data exceeds forecasts.
For investors contemplating gold purchases, Singhania recommended a strategy of buying on dips, positioning gold as a hedge against inflation and financial risks. Monitoring significant upcoming events, like the October jobs report and the November Fed meeting, will be crucial for yielding directional signals.
In the near term, attention is likely to shift toward the release of the US Personal Consumption Expenditures (PCE) Price Index, second-quarter GDP data, and remarks from Fed officials. Any significant fluctuations in the Indian rupee could also directly affect domestic gold prices.
As analysts predict a continued upward trajectory for gold, they caution that while occasional dips may occur, the overall sentiment remains positive. Immediate support levels are noted at ₹1,08,500 and ₹1,05,800 per 10 grams, with critical floors identified internationally at $3,620 and $3,540 per ounce.
