Gold prices reached record levels on September 29, 2023, driven by a weakening dollar and rising expectations of further interest rate cuts from the US Federal Reserve. The surge in gold prices was mirrored in domestic markets, particularly in India, where retail prices for gold increased significantly across major cities.
Record Highs on the MCX
On the Multi Commodity Exchange (MCX), December gold futures rose to an all-time high of Rs. 1,15,590 per 10 grams before settling at Rs. 1,15,436, marking a gain of 0.47% for the session. Silver futures also saw a notable increase, with December contracts reaching Rs. 1,43,968 per kilogram before stabilizing at Rs. 1,43,433, a rise of 1.09%. The dollar index fell by more than 0.20%, making gold more affordable for international buyers and consequently boosting global demand.
Internationally, spot gold also hit new highs, as markets anticipated a 90% chance of a rate cut by the Federal Reserve in October, alongside a 65% probability of another reduction in December, according to data from the CME FedWatch Tool.
Expert Analysis on Gold and Silver
Despite short-term fluctuations, analysts maintain a positive outlook for bullion. Manoj Kumar Jain from Prithvifinmart Commodity Research indicated that gold has robust support levels between Rs. 1,14,200 and Rs. 1,13,650, with resistance around Rs. 1,15,400 to Rs. 1,16,000. For silver, support lies near Rs. 1,40,400 to Rs. 1,39,100, with resistance close to Rs. 1,45,000.
Meanwhile, Rahul Kalantri of Mehta Equities noted that international gold support is found between $3,730 and $3,710 per troy ounce, with resistance at $3,785 to $3,820. This suggests that any dips in gold prices could 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 reached Rs. 1,16,400, up by Rs. 920. The 22-carat segment also experienced gains, with one gram priced at Rs. 10,670, up by Rs. 85, and 10 grams trading at Rs. 1,06,700, marking a rise of Rs. 850.
In Chennai, 24-carat gold was quoted at Rs. 11,673 per gram, an increase of Rs. 65, with the price for 10 grams at Rs. 1,16,730, a gain of Rs. 650. The 22-carat gold in the city reached Rs. 10,700 per gram, up by Rs. 60, while the price for 10 grams climbed to Rs. 1,07,000, reflecting an increase of Rs. 600 compared to the previous session.
With ongoing global uncertainties, a declining dollar, and indications of US Federal Reserve policy shifts, analysts anticipate that short-term volatility will continue. Nevertheless, the long-term trajectory for gold remains supported by safe-haven demand and expectations of easing monetary policy. Traders are advised to approach their positions with caution, while long-term investors may find it beneficial to accumulate on dips.
