Gold, silver hit record highs on MCX amid Trump tariff concerns, US Fed rate cut hopes; is it right time to buy bullion?

Gold price today: Rates of gold and silver touched fresh record highs in the domestic futures market in Monday's (September 1) session, buoyed by healthy spot market demand, the dollar's weakness, expectations of a US Fed rate cut in September, and persisting uncertainties over US President Donald Trump's tariff policies and their impact on global economic growth.

MCX Gold October 3 contracts jumped over 2 per cent to a record high of ₹1,05,937 per 10 grams, while MCX Silver December 5 contracts also hit their all-time high of ₹1,24,990 per kg, surging over 2 per cent.

Around 4:20 PM, Gold's October futures were trading 1 per cent higher at ₹1,04,866 per 10 grams, while silver's December futures were up 2.09 per cent at ₹1,24,415 per kg on the MCX.

Why are gold prices rising?

A confluence of factors has triggered a fresh up-move in gold prices. The biggest one is the hopes of a rate cut by the US Federal Reserve in September. After US Fed Chair Jerome Powell signalled a rate cut in his Jackson Hole speech, a few other Fed officials have indicated in the last few days that the Fed is ready to cut rates this month.

Last Thursday, according to Reuters, Fed Governor Christopher Waller said he would support an interest-rate cut in September and further reductions over the next three to six months.

Reuters reported that in a Friday social media post, San Francisco Fed Bank President Mary Daly reiterated her support for an interest rate cut, given the risks to the labour market.

The CME FedWatch tool shows that the market sees an 87 per cent probability that the US central bank will cut rates by 25 basis points this month. The US Federal Open Market Committee (FOMC) will meet on September 16-17 to decide on policy rates.

The Trump tariff uncertainty and its impact on global economic growth are another key factor, boosting gold prices. Trump's changing tones and unpredictable policy moves are key positives for gold prices as the yellow metal gains traction in times of economic uncertainty.

The Trump administration is engaged in talks with its key trading partners. However, the direction of these negotiations is unclear. India, meanwhile, has signalled that it will discuss a trade deal only if the 25 per cent secondary tariffs are removed first, according to reports.

The weakness of the dollar index is an additional factor behind the rise in gold prices. The dollar index eased about 0.10 per cent on August 31, falling by over 2 per cent monthly last month.

Since gold is priced in the US dollar, a weak US currency makes the yellow metal cheaper in other currencies, enhancing its demand.

The focus now is on US labour market data this week, including job openings, ADP employment, and non-farm payrolls, which could shape expectations about the US Fed’s next policy move.

"Gold prices neared a record high as investors weighed the future of the Federal Reserve rate cuts and uncertainty over Trump’s tariffs. Support for gold also came from last week’s US inflation data, which strengthened expectations of a Fed rate cut later this month," said Jigar Trivedi, Senior Research Analyst at Reliance Securities.

Is it the right time to buy gold?

Experts expect gold and silver prices to move further higher and suggest avoiding booking profits and buying on dips.

"We suggest avoiding any kind of short selling in gold and silver and maintaining a buy-on-dips strategy on corrective dips. Gold is expected to test ₹1,07,000, and silver is expected to test ₹1,27,000 in the short term," said Manoj Kumar Jain of Prithvifinmart Commodity Research.

According to Jain, gold has support at $3,500-3,474, while resistance is at $3,555-3,584 per troy ounce, and silver has support at $40.20-39.80, while resistance is at $41.10-41.65 per troy ounce in today’s session.

MCX Gold has support at ₹1,03,330-1,02,800 and resistance at ₹1,04,220-1,04,700, while silver has support at ₹1,20,650-1,19,500 and resistance at ₹1,23,000-1,24,400, Jain said.

Rahul Kalantri, VP of commodities at Mehta Equities, said gold has support at $3,420-3,395 and resistance at $3,465-3,480. Silver has support at $39.35-39.10 and resistance at $40.05-40.35.

In INR, Kalantri said gold has support at ₹1,03,340-1,02,940 while resistance is at ₹1,04,450-1,04,750. Silver has support at ₹1,19,450-1,18,850 while resistance at ₹1,20,950, 1,21,650.

According to Jateen Trivedi, VP Research Analyst—Commodity and Currency, LKP Securities, strong support is at ₹1,02,500, while resistance stands at ₹1,07,000.

"A decisive break above could open the path toward higher highs, while any dip toward support is likely to attract buying interest," he said.

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Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.