Introduction
Gold prices, which recently touched a historic high of ₹1,06,666 per 10 grams on the Multi Commodity Exchange (MCX), are now witnessing profit-booking pressure. The US Federal Reserve’s latest 25 basis points rate cut and the subsequent rebound in the US dollar have triggered a pullback in gold rates. Despite this correction, experts believe that gold prices may still have room for an upward move, given the global economic uncertainty.
Gold Price Movement – Domestic and International Trends
Gold Prices in India
- Last week, gold prices on MCX surged to a record ₹1,06,666 per 10 grams.
- After profit booking, MCX October 2025 futures settled at ₹1,09,900 per 10 grams.
- This marked the fifth consecutive week of gains for gold in the domestic market.
Global Gold Prices
- On COMEX, international gold prices touched an all-time high of $3,707.65 per troy ounce.
- Despite the Fed rate cut, gold prices faced selling pressure due to a stronger US dollar.
- The global rally was capped as investors shifted towards the dollar, limiting gold’s upside momentum.
Why Did Gold Prices Fall After a Fed Rate Cut?
Traditionally, a US Fed rate cut is seen as bullish for gold because lower interest rates reduce the opportunity cost of holding non-yielding assets like gold. However, this time the scenario played out differently.
Key Reasons for Pressure on Gold:
- Stronger US Dollar:
- The dollar index bounced back sharply after the Fed’s decision, reducing gold’s appeal for global investors.
- Profit Booking:
- After gold hit record highs, traders and investors booked profits, adding short-term pressure on prices.
- Global Market Sentiment:
- Markets are still uncertain about inflation trends and the pace of future Fed cuts, which is keeping volatility high.
Expert Views on Gold Price Outlook
Sugandha Sachdeva, Founder of SS WealthStreet
- Gold prices achieved another milestone by scaling new highs in both domestic and international markets.
- Despite mild profit booking, gold maintained its winning streak for the fifth straight week.
- The Fed’s rate cut of 0.25% was the first in nine months, with expectations of two more cuts this year.
Market Analysts’ Projections
- Value buying at lower levels is providing support to gold.
- If demand remains strong, MCX gold could test ₹1,12,000 per 10 grams in the coming weeks.
- Internationally, gold may continue hovering above $3,700 per ounce, provided the dollar stabilizes.
Factors That Will Drive Gold Prices in the Coming Weeks
Several macroeconomic and geopolitical factors are expected to influence gold price movements:
- US Federal Reserve Policy:
- More clarity on the Fed’s future rate cut trajectory will be crucial for gold’s long-term trend.
- US Dollar Strength:
- If the dollar continues to strengthen, gold may remain under pressure.
- Inflation Data:
- Any signs of easing inflation in the US may reduce safe-haven demand for gold.
- Geopolitical Tensions:
- Global uncertainties, including oil price volatility and geopolitical risks, could push investors back into gold.
- Physical Demand in India:
- With the festive and wedding season approaching, physical demand for gold in India could support prices in the near term.
Will Gold Prices Fall Further or Rise Again?
The big question for investors and traders is whether the current correction signals a deeper fall or just a temporary pause before another rally.
Possible Scenarios:
- Bullish Case:
- If the US dollar weakens and the Fed signals more aggressive rate cuts, gold could see a renewed rally towards ₹1,12,000 on MCX and above $3,750 on COMEX.
- Bearish Case:
- If the dollar continues to strengthen and inflation fears ease, gold may consolidate or correct towards ₹1,05,000 on MCX.
- Neutral Case:
- Gold may trade sideways, consolidating between ₹1,06,000 – ₹1,10,000 before the next big breakout.
Key Takeaways for Investors
- Gold prices remain in a long-term bullish trend despite short-term profit booking.
- The US Fed’s rate cut has added volatility but not derailed gold’s upward momentum.
- Investors should watch the dollar index, US economic data, and Fed commentary closely.
Investment Strategies:
- Short-term traders can book partial profits near current highs.
- Long-term investors may use dips to accumulate gold as a hedge against inflation and uncertainty.
- Diversification across physical gold, ETFs, and sovereign gold bonds is recommended for portfolio balance.
Conclusion
Gold prices today are facing pressure after hitting record highs, primarily due to profit booking and a stronger US dollar following the US Fed’s rate cut. However, the long-term outlook for gold remains positive, with experts projecting that MCX gold could climb towards ₹1,12,000 per 10 grams in the coming sessions.
For Indian investors, the upcoming festive and wedding season may further boost physical demand. While short-term volatility is expected, gold continues to shine as a safe-haven asset and a crucial part of any diversified investment portfolio.
