Gold rate today: Yellow metal dips as US dollar price rebounds from one-year low. US Fed rate cut in focus

Gold rate today: Following the relief rally in the US dollar rates from the one-year low, gold price today witnessed some profit-booking during the early morning session on Tuesday. On the Multi Commodity Exchange (MCX), today’s gold rate opened downside at ₹71,898 per 10 gm and touched an intraday low of ₹71,770 within a few minutes of the Opening Bell. In the international market, spot gold price oscillates around $2,506 per ounce, recording an intraday loss of around 0.45 per cent. In contrast, the COMEX gold price is around $2,541 per troy ounce, losing nearly 0.53 per cent during the early morning session on Tuesday.

According to commodity market experts, gold prices today are under pressure as US dollar rates rebound after touching a one-year low. They said that the rally in the US dollar price is just a relief rally as the US Fed rate cut buzz is expected to work as a taper for the US greenback. They advised gold investors to maintain buy-on-dips and predicted the MCX gold rate to touch ₹72,800 and ₹73,500 per 10 gm.

Bounce back in US dollar rates

Speaking on the triggers dragging gold prices today, Anuj Gupta, Head of Commodity & Currency at HDFC Securities, said, “Gold rate today is under pressure due to the relief rally in the US dollar prices. The US dollar index has broken its crucial support of 101.50, and it is under 101, which augurs a sell-on-rise sentiment regarding the USD in the Forex market. So, this dip in the gold price today should be seen as an opportunity for bottom fishing.”

Jateen Trivedi, VP Research Analyst — Commodity and Currency at LKP Securities, said, “The precise magnitude, pace, and frequency of these rate cuts will depend on future economic data, particularly inflation, employment figures, and other key economic indicators. As a result, global markets are actively pricing in these potential cuts, and Gold, being a non-yielding asset, stands to benefit from the lower interest rate environment. Seventy-one thousand five hundred will act as good support on any decline to enter in buying Gold whereas 72500 will continue at resistance.”

Anuj Gupta of HDFC Securities said that bias for the MCX gold rate today is positive and the yellow metal price may touch ₹72,800 and ₹73,500 on the possible looking bounce-back.

US Fed rate cut in focus

IG market strategist Yeap Jun Rong said a September US Fed rate cut has been set in stone, but the debate around its size may prompt a wait-and-see mode as investors look forward to upcoming economic data to anchor their views.

According to the CME FedWatch tool, traders see a 70 per cent chance of a 25-basis-point (bp) rate cut and about a 30 per cent probability of a more substantial 50-bp reduction.

A low interest rate environment tends to boost non-yielding bullion’s appeal.

San Francisco Federal Reserve President Mary Daly said a quarter-percentage point cut in borrowing costs next month was likely.

“We expect the upward trend for gold prices to persist, given its positive performance in the past Fed rate-easing cycles, healthy central bank demand and its status as a good hedge against geopolitical and economic risks,” Yeap said.

Middle East tension is still around

Residents of Lebanese cities felt only partial relief on Monday that one of the biggest exchanges of fire between the armed group Hezbollah and the Israeli military the previous day was over, worn down by the relentless tension of 10 months of conflict.

(With inputs from Reuters)

Disclaimer: The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.