Gold Prices Hit One-Month High on MCX Amid Fed Rate Cut Speculation
Gold prices continued their upward trend last week despite a stronger US dollar. On Friday, MCX gold closed at ₹79,019 per 10 grams, marking a 0.80% weekly gain from ₹78,400. Meanwhile, international gold prices showed a more modest rise, with COMEX gold finishing at $2,748.70 per troy ounce and spot gold at $2,701.55 per ounce.
Factors Driving the Surge
Experts attribute the stronger performance of domestic gold prices to the weakening Indian Rupee, which provided additional support to the MCX gold rally. Despite the dollar's strength, gold prices are rising on expectations of a US Federal Reserve rate cut, following softer inflation and retail sales data in December 2025.
Sugandha Sachdeva, founder of SS WealthStreet, explained, “Gold is holding firm due to easing inflation, with core inflation dropping to 3.2% in December from an average of 3.4% in the previous months. Soft retail sales data has fueled speculation about a potential Fed rate cut, boosting gold’s appeal.”
Additional Triggers
Market sentiment is also influenced by the upcoming inauguration of Donald Trump as the 47th US president on January 20, 2025. Investors are keenly watching his economic outlook, especially his strategies to manage inflation.
With declining US Treasury yields and expectations of a dovish Fed stance, gold remains an attractive option for investors navigating an uncertain economic landscape.