Gold prices today in India staged a sharp rebound, climbing by ₹2,600 to reach ₹1,24,400 per 10 grams. This recovery comes after a brief decline and is driven by renewed safe-haven buying amid strong global cues — notably, growing expectations around U.S. Federal Reserve policy, geopolitical tensions, and broader economic uncertainty.
Why Gold Is Rallying Again
Safe-Haven Demand Returns
Amid global volatility, investors are flocking back to gold as a hedge. The rebound was largely fueled by safe-haven buying ahead of a closely watched U.S. Federal Open Market Committee (FOMC) meeting.
Analysts at HDFC Securities note that a potential Fed rate cut is at the heart of the renewed demand.
Interest Rate Outlook: Dovish Fed in Focus
A key factor supporting gold’s rally is the growing belief that the Fed may ease rates. Lower interest rates make gold more attractive because it does not yield interest, reducing the opportunity cost of holding it.
If the Fed cuts rates, real bond yields could soften, and the dollar may weaken, both of which are favorable for bullion.
Geopolitical Tensions Fueling the Rally
Tensions in multiple regions — especially the Middle East — are contributing to investor anxiety and boosting gold’s safe-haven appeal.
Such geopolitical uncertainty, combined with growing de-dollarisation trends (where countries reduce reliance on the U.S. dollar), is pushing central banks and investors toward gold.
Domestic Dynamics: Impact on Indian Prices
Physical Market Reaction
In India, gold of 99.5% purity jumped to ₹1,23,800 per 10 g (inclusive of taxes) from ₹1,21,200. The 99.9% purity variant also saw gains.
Silver, too, rebounded strongly — up ₹6,700 per kilogram to ₹1,51,700, underscoring a broader rally in precious metals.
Inflation Link & Core Price Dynamics
Interestingly, though gold prices in India are being pushed higher by global factors, some analysts point out that this can distort domestic inflation measures. As gold makes up a not-insignificant component of India’s core inflation index, its volatility can skew readings.
Will the Rally Sustain? Key Risks & Catalysts
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Fed Policy Outcome: The next FOMC decision could swing sentiment dramatically. A dovish tone would likely reinforce the rally, while any unexpected hawkish signals may weigh.
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Geopolitical Developments: Escalation or de-escalation in geopolitical tensions (e.g., in the Middle East) will influence safe-haven flows.
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Domestic Demand: Indian import demand, especially during the festival season or wedding season, could boost local physical gold purchasing. However, if global prices cool, profit-taking could challenge momentum.
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Dollar Strength: A resurgent U.S. dollar could make gold less attractive — though current sentiment favors dollar weakness if rate cuts materialize.
Bottom Line
Gold’s recent rebound to ₹1,24,400 per 10 grams reflects a powerful mix of global uncertainty, dovish expectations for U.S. monetary policy, and traditional safe-haven demand. While risks remain — especially around central bank decisions and geopolitical developments — the rally underscores how gold continues to shine in times of macro instability.
