Gold may consolidate, but bias will continue to stay positive on Fed rate-cut hopes: Analysts

New Delhi: Gold prices are likely to remain in a consolidation phase in the near term, but the overall bias will continue to stay positive amid heightened expectations of a US Federal Reserve rate cut in its September policy meeting, analysts said.

Traders will closely track US macroeconomic data, such as Q2 GDP, PCE inflation, and speeches from Fed officials, which will provide more insights into the monetary policy stance of the Federal Reserve and the trajectory of the bullion sentiment, they added.

“Gold prices may continue to see some consolidation, but the bias is expected to remain positive. The US Federal Chair Jerome Powell’s comments have raised expectations of an interest rate cut at the September meeting,” said Pranav Mer, Vice President, EBG - Commodity & Currency Research, JM Financial Services. Investors will keep track of geopolitical and trade developments, he added.

Last week, the precious metal regained the psychological Rs 1 lakh level on the Multi Commodity Exchange, by rising Rs 956 or 1 per cent to Rs 1,00,391 per 10 grams.

The gains came on strong buying interest after Federal Reserve Chair Powell signalled a possible shift in monetary policy at the Jackson Hole symposium, hinting that the central bank may soon cut interest rates for the first time since December.

The upcoming US Fed’s FOMC meeting is set to happen on September 16-17. Powell also said that Fed officials could still consider delaying a rate cut to later this year if the tariffs imposed by US President Donald Trump somehow manage to have a pronounced effect on domestic prices.

According to Prathamesh Mallya, DVP - Research, Non-Agri Commodities and Currencies, Angel One said gold prices had been correcting in recent weeks due to a lack of fresh triggers, but Powell’s statement provided a fresh boost.

“The chances of a September rate cut and a further cut later in the year are now significantly higher. This allowed for a sharp move in MCX gold as traders looked to benefit from cheaper prices after the dollar weakened,” Mallya said. Mallya observed that uncertainty continues to linger in global markets.

In the international market, the most traded Comex gold futures for December delivery rose 1.09 per cent on Saturday to settle at $3,418.50 per ounce, reflecting renewed optimism among investors after Powell’s remarks. Analysts said the near-term outlook for gold depends on a combination of incoming US economic data, progress in Russia-Ukraine talks and clarity on trade tariffs. PTI