Gold prices in India reached their highest level this month on Wednesday (August 28). The cost of 24-karat gold rose by ₹220 to ₹73,250 per 10 grams, according to Goods Returns data.

The rally is driven by investors seeking safety due to the Middle East crisis and anticipation of a potential interest rate cut by the Federal Reserve.

Globally, gold prices saw a slight decline.

Spot gold fell by 0.7% to $2,507.64 per ounce, after hitting a record high of $2,531.60 on August 20.

US gold futures dropped by 0.4% to $2,542.80 per ounce.

The dollar index’s 0.3% rise made gold less attractive to foreign investors.

Kelvin Wong, OANDA’s senior market analyst for Asia Pacific, noted that the market is waiting for a catalyst to push gold prices beyond the $2,532 per ounce mark.

While talking to news agency Reuters, he predicted resistance around $2,585 per ounce to $2,595 per ounce in the long term.

Traders are closely watching the US personal consumption expenditure (PCE) data set for release on Friday (August 30).

The data will provide insights into the likelihood of a Federal Reserve rate cut next month.

Federal Reserve Chair Jerome Powell recently hinted at imminent rate cuts, which, coupled with rising US consumer confidence and concerns about the labour market, supports gold prices.

Renisha Chainani, Research Head at Augmont Gold for All, highlighted the strong performance of gold.

Chainani emphasised that gold needs to reclaim the record high of $2,532 per ounce (₹72,270 per 10 grams) before facing the next hurdle at $2,550 per ounce (₹72,500 per 10 grams).

A breakthrough could lead to a target of $2,600 per ounce (₹75,000 per 10 grams) and beyond.

Prathamesh Mallya, DVP- Research at Angel One, stated that gold is poised for its best performance since 2020.

The precious metal’s upward trend is supported by hopes of US rate cuts and ongoing geopolitical tensions.

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