On Friday, gold prices experienced a notable surge across global bourses, driven by US Fed Chairman Jerome Powell's speech at the Jackson Hole Symposium. On the Multi Commodity Exchange (MCX), gold rates reached an intraday high of ₹71,940 per 10 grams, marking an approximate one percent rise from the intraday low of ₹71,302. This rally in gold prices was triggered by Powell’s indication of a potential rate cut by the US Federal Reserve in their September meeting.

Market Impact of Powell's Speech

Jerome Powell’s speech at Jackson Hole has significantly influenced the gold market. The US Fed minutes and Powell's dovish remarks have bolstered the expectation of an imminent rate cut, with many experts predicting that the Federal Reserve will lower interest rates by 25 basis points in their next meeting. This potential policy shift is expected to drive gold prices higher as investors seek safe-haven assets amid anticipated monetary easing.

According to Sugandha Sachdeva, Founder of SS WealthStreet, "Gold prices soared to a new record high of $2,531 per ounce this week, fueled by increasing expectations of the beginning of a monetary easing cycle in the US next month. The recent Fed minutes have reinforced the probability of a 25 basis points rate cut in September. Moreover, Powell’s dovish stance, indicating potential substantial rate cuts, has further supported the bullish sentiment towards gold."

Retracement in US Dollar Rates

The impact of Powell’s speech is also reflected in the US dollar rates, which have dropped to a seven-month low. A weaker dollar typically enhances the attractiveness of gold as an investment, leading to increased demand. This trend is supported by rising holdings in the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, which reached 859 tons in July, marking the highest level in seven months.

Sugandha Sachdeva adds, "The anticipation of lower borrowing costs has driven strong buying interest in gold. Lower interest rates typically reduce the opportunity cost of holding gold, making it more appealing to investors."

Gold Price Outlook: Key Levels to Watch

For the near term, gold prices are facing short-term resistance at ₹72,300 per 10 grams. A decisive move above this resistance level could propel prices towards ₹73,500 per 10 grams in the coming days. On the downside, support for gold is observed at ₹70,500 per 10 grams. This support level indicates a potential floor for gold prices if the market experiences a pullback.

Gold Price Target for 2025

Looking further ahead, experts are optimistic about gold’s long-term prospects. Anuj Gupta, Head of Commodity & Currency at HDFC Securities, advises investors to buy and hold gold for the medium to long term. He predicts that the anticipated rate cut in September will mark the end of the high interest rate regime, ushering in a low interest rate period that could last six to nine months. This environment is expected to be favorable for gold prices.

Jonathan Rose, CEO of Genesis Gold Group, echoes this sentiment, forecasting that gold could reach $3,000 per ounce by 2025. He notes that historical trends show rate cuts have been beneficial for gold prices, and current market instability continues to drive gold to new highs.

Conclusion

The recent rally in gold prices following Jerome Powell’s speech reflects broader market expectations of an imminent rate cut by the US Federal Reserve. With gold prices touching significant levels and expert forecasts predicting further gains, investors are advised to monitor key resistance and support levels while considering long-term investment strategies. The potential shift towards a lower interest rate environment presents a promising outlook for gold, positioning it as a strong investment asset in the coming years.

Also Read : Expert Insights: Midcaps, Smallcaps, and Defensive Stocks for Long-Term Growth

Check latest IPO Review & analysis, Live GMP today, Live Subscription Status Today, Share Price, Financial Information, latest IPO news, Upcoming IPO News before applying in the IPO. The Upcoming IPOs in this week and coming weeks are Indian Phosphate Limited, Premier Engineers. The current active IPO is Rapid Multimodal Limited, Resourceful Automobile Limited, Ideal Technoplast Industries Limited.
Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst & Finance Saathi Telegram Channel for Regular Share Market, News & IPO Updates

Start your Stock Market Journey and Apply in IPO by Opening Free Demat Account in Choice Broking FinX & Upstox.