Synopsis: Gold prices rose today as investors await crucial U.S. economic data to gauge the likelihood of a Federal Reserve rate cut in 2025. MCX gold opened at INR 77,000 per 10 grams, buoyed by a weakening U.S. dollar. Experts predict that gold may remain bullish in 2025 due to geopolitical risks and potential government debt issues.
Gold prices gained traction in the early morning trading session today as investors shifted their attention to crucial upcoming U.S. economic data that could reveal insights into the Federal Reserve's interest rate strategy for 2025. The MCX gold rate (February 2025 contract) opened at INR 77,000 per 10 grams, peaking at an intraday high of INR 77,074 within minutes of the session’s start. On the international front, spot gold prices hovered near $2,632 per troy ounce.
Key Drivers Behind the Gold Price Surge
Market experts highlight that today's uptick in gold prices can largely be attributed to the weakening of the U.S. dollar. A softer dollar tends to make gold, priced in dollars, more affordable in other currencies, spurring increased buying activity. Commodity market observers note that investors are closely watching for profit-booking opportunities as the FOREX market fluctuates.
Kyle Rodda, a financial analyst at Capital.com, shared his perspective on the current gold trend:
“Gold seems to be consolidating within a tight range, a typical sign that the market may soon experience a breakout. I predict that the breakout will likely be on the upside.”
Rodda further explained that gold’s bullish momentum is expected to carry through 2025, driven by heightened geopolitical risks and rising government debt levels under Trump’s anticipated fiscal policies. He noted that while U.S. inflation remains above 2 percent, the Fed may slow down its rate-cutting plans, but gold’s appeal as a safe-haven asset could persist.
Expert Opinions on Key Levels for MCX Gold
Anuj Gupta, Head of Commodity & Currency at HDFC Securities, echoed Rodda’s optimism, pointing out that the current rise in gold prices is tied to profit-booking triggers from U.S. dollar rate fluctuations. Gupta stated:
“Investors are waiting for the upcoming U.S. data to provide clarity on the economic outlook and confirm whether the U.S. Federal Reserve will implement a rate cut in 2025.”
He added that the probability of a January rate cut seems low following the December 2024 Fed meeting, as inflation still exceeds the 2 percent target. However, traders remain on edge, awaiting concrete economic data.
According to the CME’s FedWatch Tool, there is just an 11.2 percent chance of a rate cut in January 2025, and traders expect a slow, cautious approach to future cuts as the Fed battles persistent inflation.
Summary
- Gold prices have seen a slight uptick due to weakness in the U.S. dollar and expectations for future rate cuts by the U.S. Federal Reserve.
- MCX gold rates opened at INR 77,000 per 10 grams, while international spot gold prices were around $2,632 per troy ounce.
- Analysts expect gold prices to remain bullish in 2025, driven by geopolitical risks and potential U.S. fiscal challenges.
- The market awaits further clarity from U.S. data, which will provide insights into the Fed's rate cut decisions in 2025.
Disclaimer: The views expressed in this article are based on market analysis and expert opinions. Gold investments are subject to market risks, and it is advisable to consult a certified financial advisor before making any investment decisions. The prices mentioned are subject to change based on market conditions.
