Is Gold Trading Range-Bound This Week with a Positive Bias Due to Safe Haven Demand?
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Synopsis
As global markets fluctuate, Indian gold prices have shown a slight recovery this week, driven by safe haven demand and the US Federal Reserve's hint at potential rate cuts. With geopolitical tensions and upcoming economic data, the precious metal's movement remains a focal point for investors.
Key Takeaways
- The Indian bullion market showed slight recovery this week.
- Gold prices are influenced by US Federal Reserve policies.
- Geopolitical tensions contribute to increased bullion demand.
- Upcoming US economic data will impact market trends.
- Investors are advised to stay alert to potential market shifts.
New Delhi, Sep 20 (NationPress) The prices of Indian bullion saw a slight increase this week after a decline from the peak reached on September 16, supported by the US Federal Reserve's indication of potential rate cuts this year.
The cost of 24-carat gold (10 grams) began the week at Rs 1,09,603 on Monday, peaked at Rs 1,10,540 on Tuesday, and closed the week at Rs 1,09,873, as per data from the India Bullion and Jewellers Association (IBJA).
Analysts noted, “Gold exhibited a range-bound but positive trend, gaining 0.38 percent at $3,657 and 0.26 percent at Rs 1,09,330, as the Fed’s policy bolstered the recent rate cut while leaving the possibility of two additional cuts based on forthcoming data.”
The prices maintain their strength, with attention now directed towards next week’s crucial US data, including GDP, Manufacturing and Services PMI, and the PCE Price Index, which are likely to influence future trends.
Gold is projected to trade within the range of Rs 1,07,500 to Rs 1,11,000, according to market forecasts.
On September 17, spot prices reached an astonishing $3,683 per troy ounce—an all-time high, reflecting a 43 percent increase this year. Meanwhile, MCX October futures were quoted at Rs 1,10,138 per 10 grams.
The recent softening in US labor data and the Fed's dovish remarks have diminished the opportunity cost of holding gold, attracting risk-averse investors toward bullion.
Reports indicate that central banks, particularly in Asia, are increasing their gold reserves while reducing dependence on the dollar.
Geopolitical tensions, particularly in the Middle East and ongoing Sino-US trade disputes, have prompted risk-averse investors to bolster their holdings in bullion.
However, analysts have warned that the current rally may be overextended, reminding investors that gold peaked in 2011 before entering a prolonged decline due to reversed speculative inflows.
Traders are anticipated to keep their eyes on next week’s US economic releases for insights into the Fed's strategy, while Indian consumers and jewelers remain focused on the domestic festive-season demand.
Point of View
It is essential to highlight the intricate dynamics shaping the gold market. The recent movements in bullion prices reflect broader economic trends and investor sentiment, particularly in the context of geopolitical tensions and monetary policy. Our focus remains on delivering clear and reliable insights that empower our readers to navigate these developments effectively.
NationPress
20/09/2025
Frequently Asked Questions
What caused the recent fluctuation in gold prices?
The recent fluctuation in gold prices was driven by the US Federal Reserve's indication of potential rate cuts and rising geopolitical tensions, prompting increased demand for safe-haven assets.
What is the expected trading range for gold next week?
Gold is expected to trade within the range of Rs 1,07,500 to Rs 1,11,000 next week, according to market forecasts.
