On Tuesday, August 26, gold prices increased while reaching their strongest level in two weeks due to a weaker dollar. The renewed concerns over the Federal Reserve’s policy direction lifted demand for safe-haven assets. The gold price rose 0.2% to $ 3,371.28 per ounce by 0309 GMT, the highest since August 11.
For December, US gold futures delivery was stable at $3,418.90 an ounce. According to Goodreturns, gold prices in India stood at ₹1.01 lakh per 10 grams for 24 karat and ₹93,040 per 10 grams for 22 karat.
The move was made because US President Donald Trump dismissed Federal Reserve Governor Lisa Cook due to issues related to mortgage borrowing. This action disturbed the markets and raised questions about the central bank's independence. The US dollar index slipped 0.2%, making bullion cheaper for overseas buyers.
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Darshan Desai, CEO of Aspect Bullion and Refinery, stated, “Gold prices increased following the sudden dismissal of Federal Reserve Governor Lisa Cook by US President Donald Trump, which prompted a significant reaction in equity markets and drove investors towards safe-haven assets. The yellow metal is expected to remain supported by rising expectations of a potential Federal Reserve rate cut next month, particularly if concerns about the central bank’s independence continue to affect the US Dollar.”
The market is evaluating the latest comments from Fed Chair Jerome Powell, who indicated that a rate cut might be possible in September, while also being wary of inflationary pressures.
Non-yielding gold generally benefits when interest rates decrease, as the cost of missing out on other investments drops. Investor attention has shifted to the upcoming release of the Price Index PCE (Personal Consumption Expenditures) on Friday (August 29), the Fed’s preferred inflation gauge, to gain insight into future policy decisions.
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Rahul Kalantri, VP of Commodities at Mehta Equities, mentioned that bullion prices might experience volatility until the inflation figures are released. “Gold has support levels at $3,352–3,335 an ounce, with resistance noted at $3,395–3,410 an ounce. In the Indian market, support is found at ₹1,00,240–99,850 per 10 grams, while resistance is seen at ₹1,00,950–1,01,150 per 10 grams,” he stated.
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