Gold prices reach record high amid hopes of rate cuts
Gold hit a record high of $2,111.39 per ounce on Monday after the US Federal Reserve Chair Jerome Powell's optimistic remarks raised expectations of an early interest rate cut next year. Spot gold rose 0.7% to $2,085.76 per ounce, while US gold futures climbed nearly 1% to $2,107.60. In the domestic market, Gold is now priced above Rs. 65,000 per 10 grams across all regions.
Powell's remarks and market factors drive gold prices
On Friday, Powell's remarks suggested that "the risks of under- and over-tightening are becoming more balanced," but the Fed is not currently considering lowering rates. Traders now anticipate a 70% chance of a rate cut by the US central bank by next March, as per CME's FedWatch Tool. The market interpreted Powell's comments as dovish, causing the dollar index and 10-year Treasury yields to drop on Friday, making gold more appealing for other currency holders.
All-time high price likely to impact wedding sales
On Saturday, gold prices in Delhi markets rose by 1.38% per 10 grams to reach Rs. 65,350. This means gold became expensive by Rs. 890 per 10 grams in a day. The all-time high price is likely to impact gold buying during the ongoing wedding season. Local jewelers reported lower footfall than usual and a growing trend toward gifting other lifestyle products at weddings due to the rising gold prices.
