Gold prices rose on Wednesday, January 29, marking a new all-time high of ₹80,979 per 10 grams in futures trade. The increase of ₹80 or 0.1% was driven by fresh positions taken by speculators amid strong spot demand.
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On the Multi Commodity Exchange (MCX), April delivery gold contracts surged in business turnover of 13,257 lots.
Despite global gold futures decreasing slightly by 0.11% to $2,760.41 per ounce in New York, gold prices in India saw a significant rise.
Analysts attribute the domestic price hike to speculative trading and a weaker rupee.
Factors behind the gold price surge
Renisha Chainani, Head of Research at Augmont, pointed out that gold’s rise is partly due to concerns surrounding tariffs, economic deficits, and de-dollarization.
She also highlighted the ongoing focus on the US Federal Reserve’s policy meeting, where the central bank is expected to hold interest rates steady.
The CME FedWatch tool suggests that the likelihood of a 25-basis point rate cut in May is 40%, while 51.5% of traders expect no change in rates.
Meanwhile, US President Donald Trump’s repeated calls for rate cuts have added another layer of uncertainty to the markets.
His remarks on reducing borrowing costs globally are making the Fed’s job more complicated, further impacting the financial landscape and driving demand for safe-haven assets like gold.
Outlook: Should you buy gold?
Gold’s steady rise in recent days signals a positive outlook, supported by external factors like geopolitical uncertainties, fluctuating tariffs, and US monetary policy. P
rathamesh Mallya, DVP-Research at Angel One Ltd, noted that gold prices surged over 2% last week as market participants sought refuge in safe-haven assets amidst concerns about rate cuts and tariff ambiguity.
As the US Federal Reserve prepares to conclude its meeting, the market’s anticipation of stable rates might provide further support to gold prices.
In addition, global uncertainties driven by Trump’s policy statements are likely to continue boosting the appeal of gold.