Gold prices increased by ₹118 to ₹71,746 per 10 grams in futures trading on Tuesday, driven by speculators building fresh positions amid strong demand in the spot market. Analysts attribute this rise to new positions taken by market participants, contributing to the price uptick.
Globally, gold futures also experienced a slight increase of 0.09%, with prices reaching $2,535 per ounce in New York. The focus is now on upcoming US economic data, particularly the Consumer Price Index (CPI) to be released on Wednesday, and the Producer Price Index (PPI) expected on Thursday. According to a Reuters poll, the headline CPI is expected to rise by 0.2% month-on-month in August, maintaining the same pace as in July.
Yeap Jun Rong, a market strategist from IG, anticipates that the inflation data will reflect further disinflation, potentially giving the Federal Reserve room to ease interest rates. He believes that unless there are significant surprises in the data, gold prices will remain well-supported above the $2,500 level, with a forecast of reaching over $2,660 in the coming months.
Although gold prices are currently consolidating within an overall upward trend, recent gains have been somewhat limited by a slight rebound in the US dollar. Lower interest rates tend to make non-yielding assets like gold more attractive by reducing the opportunity cost of holding them. The Federal Reserve is widely expected to ease rates in its next meeting, with traders estimating a 71% chance of a 25-basis-point cut compared to a 29% chance of a larger, 50-basis-point reduction, according to the CME FedWatch Tool.
Renisha Chainani, Head of Research at Augmont – Gold For All, observed that the current range for gold prices is between $2,470 per ounce (₹71,000 per 10 grams) and $2,530 per ounce (₹72,300 per 10 grams). She noted that market participants are waiting for a catalyst that could trigger a more decisive price movement. Should gold fall below $2,470 per ounce, profit-taking could push prices down to $2,430 per ounce (₹70,000 per 10 grams) or even $2,400 per ounce (₹69,000 per 10 grams). On the other hand, an upward breakout could lead to new highs of $2,550 per ounce (₹73,000 per 10 grams) or even $2,600 per ounce (₹75,000 per 10 grams) in the short term.
London-listed company KEFI Gold and Copper plc (LON:KEFI) is an exploration and development company focused on gold and copper deposits in the highly prospective Arabian-Nubian Shield. The Company operates in Ethiopia and Saudi Arabia with projects including Tulu Kapi project, Jibal Qutman EL and Hawiah.
