Is Gold Rallying Due to Rising Expectations of a US Fed Rate Cut?
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Synopsis
Gold prices have surged significantly, reflecting growing expectations of a US Federal Reserve rate cut. This article provides insights into the recent market trends, the impact of economic policies, and future predictions for gold prices. Stay informed about the factors driving this valuable asset's fluctuations in today's economic landscape.
Key Takeaways
- Gold prices increased by Rs 1,324 this week.
- Expectations of a rate cut by the US Federal Reserve are driving the surge.
- Current price for 10 grams of gold is Rs 1,26,666.
- Support and resistance levels for gold are critical for market analysis.
- Future price movements will depend on economic factors and investor behavior.
New Delhi, Nov 29 (NationPress) The value of 24-carat gold (10 grams) jumped by Rs 1,324 throughout the week, driven by safe haven investments and rising anticipations regarding a rate cut by the US Federal Reserve.
The final price for 10 grams of 24-carat gold rested at Rs 1,26,666 at the week's close, up from Rs 1,25,342 at the start of the week, as reported by the India Bullion and Jewellers Association (IBJA).
The likelihood of the Federal Reserve reducing interest rates by 350 to 375 basis points in its upcoming December monetary policy session has soared to 86.9%, up from 71% the previous week, per the CME FedWatch Tool.
Experts noted that gold has re-established resistance in the $4,215 to $4,240 range and requires a strong catalyst to break past $4,240.
They further indicated that a consistent rise could aim for the previous peak of $4,400 (Rs 131,500), while a decline could revert to $4,100 (Rs 123,000).
However, the precious metal experienced a downturn on Friday following the conclusion of the US government shutdown, which alleviated worries about economic disruption.
Analysts stated that gold has support levels around Rs 1,25,750-1,24,980 per 10 grams and resistance between Rs 1,27,750 and Rs 1,28,400. Meanwhile, silver holds support at Rs 1,60,950-Rs 1,59,400 per kg and resistance at Rs 1,63,850-1,64,900.
Forecasts suggest that the current weakness in bullion may persist in the short term unless there's a revival in safe haven buying or a decisive shift in the Federal Reserve's policy direction.
Bank of America posited earlier this week that gold could potentially reach $5,000, influenced by macroeconomic factors such as high government debt, ongoing inflation, lower interest rates, and unconventional economic strategies in the US.
They pointed out that institutional investments remain relatively low even as prices ascend.
Declining demand from China, supply limitations in significant mined metals, and reduced global inventories are also critical factors to monitor, according to the bank.
Point of View
It's crucial to recognize the delicate balance between economic factors and market reactions. The rise in gold prices, driven by anticipated Federal Reserve rate cuts, highlights the ongoing volatility in global markets. We must remain vigilant in analyzing these trends to provide our audience with accurate and timely information.
NationPress
29/11/2025
Frequently Asked Questions
What caused the recent surge in gold prices?
The surge in gold prices is primarily driven by safe haven buying and heightened expectations of a US Federal Reserve rate cut.
What is the current price of 24-carat gold?
The current price of 24-carat gold is Rs 1,26,666 for 10 grams.
What are the resistance and support levels for gold?
Gold has support at Rs 1,25,750-1,24,980 and resistance at Rs 1,27,750-Rs 1,28,400.
What does the future hold for gold prices?
Analysts expect gold prices may continue to fluctuate until there is a renewed surge in safe haven investments or a clear change in the Federal Reserve's policies.
How could global economic factors influence gold prices?
Global economic factors such as inflation, government debt, and interest rates significantly impact gold prices, as they affect investor confidence and buying behaviors.
