NEW DELHI: Having made five consecutive weekly gains on hopes of slower rate hikes by the US Federal Reserve, gold prices today hit a fresh all-time record high in India. On , February gold futures rose to Rs 57,099 per 10 grams. The yellow metal, treated as a haven asset during uncertain times, is up 4% so far in the calendar year 2023.
The gold price rise comes amid weakness in the US dollar and softening of US treasury yields. Analysts say investors are seeking refuge in the safe haven metal amid concerns over a global economic slowdown.
“MCX gold prices are likely to trade with a positive bias and rise towards Rs 57,200 level in the coming trading sessions,” ICICI Direct said.
At its upcoming policy meeting, the Fed is expected to raise rates by 25 basis points, having slowed the pace to 50 bps in December after four consecutive 75 bps increases.
Lower interest rates tend to be beneficial for bullion, decreasing the opportunity cost of holding the non-yielding asset.
The dollar index dipped 0.2%. A weaker greenback makes dollar-priced bullion more affordable for many buyers.
Traders will focus on a slew of economic data from the US this week before the FOMC meeting on February 1. PMIs from the Euro area, UK and US will be the focus today, followed by the US fourth-quarter GDP report on Thursday.
In the international bullion market, spot gold price rose 0.2% to $1,935.69 per ounce.
“Gold might consolidate here as the bond market probably won’t rally until we get to some major US GDP or core PCE data later this week. Fed rate cut bets continue to grow as recession outcomes seem more likely,” said market analyst Edward Moya of OANDA.
Back home, the Indian government is expected to slash the import duty on gold, which could lift retail sales by making the metal cheaper ahead of peak demand season in the world’s second-biggest bullion consumer, according to a recent report by Reuters.
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