Daijiworld Media Network – New York
New York, Sep 2: Gold prices have extended their rally to fresh life-time highs, driven by hopes of a US Federal Reserve rate cut and growing concerns over the Fed’s independence. Spot gold rose for the fifth consecutive session on September 1, trading at 3,475 (up 0.80%) while the MCX October contract climbed 0.87% to 1,04,724.
For the week ending August 29, gold registered a 2.25% gain at 3,448. Analysts note that the metal’s momentum is supported by central bank buying, strong ETF inflows, and expectations of monetary easing.
US data: Personal spending rose 0.3% in July, while the Core PCE Price Index (Fed’s preferred gauge) accelerated to 2.9% y-o-y. Despite inflation staying above the 2% target, markets are pricing in a 25-bps rate cut at the September 16–17 FOMC meeting.
Fed signals: Governor Christopher Waller said he supports a September cut and hinted at the possibility of a larger move if the economy weakens.
Trade & tariffs: A US appeals court ruled most of Trump’s tariffs illegal but allowed them to remain until October pending Supreme Court review, adding further uncertainty to markets.
ETF holdings: Global gold ETF holdings surged to a two-year high of 93.282 Moz, up 12.59% YTD, while COMEX inventories have fallen 13.65% from record highs.
Central banks: For the first time since 1996, central banks’ direct gold holdings have surpassed their US Treasury holdings, highlighting structural demand.
CFTC data: Bullish bets on gold rose by 6,364 net-long positions, with short positions falling to a three-week low.
Global backdrop: At the SCO Summit in Tianjin, Chinese President Xi Jinping urged leaders from Russia, Iran, India, and other nations to integrate economies and establish a multipolar order, adding further geopolitical support for gold.
Meanwhile, the US Dollar Index hovered at 97.68, down 0.10%, while bond yields weakened in a bull steepening move.
According to Praveen Singh, Senior Fundamental Research Analyst at Mirae Asset Sharekhan, “Buying on dips remains the preferred strategy. A test of all-time highs at $3,500 (?1,05,500) looks highly likely. A disappointing US ISM services or nonfarm payroll report would further boost the metal.”
Resistance: 3,650 (1,10,000) Support: 3,450 (1,03,900) 3,400 (1,02,400)
Silver Outlook: Silver is also expected to strengthen, with ETF inflows supporting prices. Analysts see resistance at 43 (1,31,500 – MCX Dec contract), while support lies at 40 (1,22,500) and 39.50 (1,21,000).