US Fed rate cut buzz fuels gold price to a new peak of $2,523. Should you buy in this rally?

Gold rate today: Ahead of the release of US Fed minutes and US Fed rate cut buzz, gold price today climbed to a new peak fo $2,523.10 per ounce in the international market. Gold futures contract on the Multi Commodity Exchange (MCX) for the October 2024 expiry reclaimed ₹72,000 per 10 gm mark. It touched an intraday high of ₹72,049 during Tuesday's session, logging an intraday rise of around 0.60 per cent.

According to commodity market experts, the gold rate today is trading flat, but the overall bias is still positive. They said that the US Fed rate cut buzz has gained momentum as the Fed meter shows an 82 per cent probability of a rate cut announcement in US Fed chairman Jerome Powell's speech at the Jackson Hole Symposium on Friday. They advised gold investors to maintain a buy-on-dips strategy until the spot gold price is above $2,480 and the MCX gold rate is above ₹71,000 per 10 gm.

Triggers for gold price today

Advising gold investors to go for bottom fishing, Anuj Gupta, Head of Commodity & Currency at HDFC Securities, said, "Gold prices have retraced in the international market from the record high, and this flat movement on the MCX should be seen from this angle. However, the overall trend is still bullish as buzz for a US Fed rate cut has further appreciated, and the FEd meter is showing over 82 per cent chances of a rate cut announcement in the Jackson Hole speech of Jerome Powell."

The HDFC Securities expert said that the buzz about the US Fed rate cut has put the US dollar rate and US Treasury yields under pressure, and investors are switching money from these assets to other assets, including gold, equity, mutual funds, etc.

Gold price outlook

Asked about the outlook for gold price today, Jateen Trivedi, VP Research Analyst of Commodity & Currency at LKP Securities, said, "This week Fed's meeting minutes will give further direction to Gold price rally which can be facing resistance in the zone of 2500-2515 and with support at 2480-2470$ Overall trend is positive for Gold as September rate cut expectation shall keep prices supportive at lower levels."

Kaynat Chainwala, AVP-Commodity Research, Kotak Securities, said, "COMEX Gold prices started the week with modest gains, peaking at a record high of $2,549.90 before settling at $2,541.00. The uptick was driven by safe-haven demand and a weaker dollar amid concerns over the resilience of the US economy, geopolitical tensions, and recent comments from the Chicago Fed President that reignited recession fears. Investors are closely watching the Fed's upcoming interest rate decision, as policymakers have signalled a cautious stance."

"Additionally, China's central bank has announced new gold-import quotas, which has fueled speculation about increased buying. Geopolitical concerns, particularly in the Middle East and a potential ceasefire between Israel and Hamas, may keep investors on edge. Today, Comex Gold prices remain steady near their all-time high as traders await Fed Chair Powell's speech at the Jackson Hole symposium, which may confirm a potential shift in Fed policy next month," Kaynat Chainwala of Kotak Securities said.

Gold rate today: Important levels to watch

Advising a buy-on-dips strategy to gold investors, Anuj Gupta of HDFC Securities said, "MCX gold rate today has immediate support at ₹71,000, whereas crucial support is now placed at ₹70,500 per 10 gm. Spot gold price today has immediate support at $2,480, whereas crucial support for the yellow metal is $2,450 per ounce. The immediate target for the MCX gold rate today is ₹72,000 and ₹72,800, while in the international market, spot gold prices may touch $ 2,530 and $2,560 per ounce in the near term."

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.