Gold Prices Reach Two-Week High Amid Uncertainty Over US Federal Reserve Policy
Gold prices rose on Tuesday. They reached their highest level in two weeks. Uncertainty over the US Federal Reserve’s policy direction boosted demand for the safe-haven asset. Spot gold increased by 0.2% to $3,371.28 per ounce, its highest since August 11.
Key Factors Driving Gold Prices
- Weaker US Dollar: The US dollar index slipped 0.2% after US President Donald Trump dismissed Federal Reserve Governor Lisa Cook, raising doubts about the Fed’s independence.
- Expectations of Fed Rate Cut: Fed Chair Jerome Powell hinted at a possible rate cut in September. This could benefit gold prices.
- Global Economic Uncertainty: Ongoing global trade tensions, geopolitical risks, and progress in Russia-Ukraine talks will influence gold prices.
Indian Market
In India, gold prices stood at ₹1.01 lakh per 10 grams for 24-karat gold and ₹93,040 for 22-karat gold. According to experts, underlying investor demand remains strong due to gold’s role as an inflation hedge and safe-haven asset.
Expert Insights
- Aksha Kamboj, Vice President of IBJA: Markets are in a consolidation phase. Sentiment remains cautiously positive. This is particularly relevant with India’s festive season approaching.
- Darshan Desai, CEO of Aspect Bullion and Refinery: Prices are expected to remain supported. This will happen if concerns over the Fed’s independence persist.
Future Outlook
Gold prices are expected to remain volatile ahead of the Personal Consumption Expenditures (PCE) Price Index release on Friday. Analysts predict support for bullion at $3,352–3,335 per ounce and resistance at $3,395–3,410
