Gold Price Today: Yellow Metal's Rates Scale New Record High Ahead Of Expected US Fed Rate Cut

Gold Price Today: Gold prices scaled to new all-time highs on September 16 as demand for a safe haven increased ahead of the US Federal Reserve's policy meeting. The Fed's rate-setting panel, the Federal Open Market Committee (FOMC), chaired by Jerome Powell, is meeting on September 16-17, and markets are widely expecting the American central bank to cut rates this time.

At 5:00 PM, October Gold futures on Multi Commodity Exchange (MCX) traded at Rs 1,10,532 per 10 grams, up by Rs 353, or 0.32 per cent. During the session, the contract touched a new all-time high of Rs 1,10,644 per 10 grams.

Around the same time, December Gold futures on COMEX traded at $3,730.10 per ounce, up by $11.10, or 0.30 per cent. During the session, the contract surged as high as $3,737.10 per ounce.

According GoodReturns data, in the physical Gold market, the price of 1 gram of 24ct Gold increased by Rs 87 to Rs 11,193, while the price for 1 gram of 22ct Gold increased by Rs 80 to Rs 10,260. Similarly, the price of 1 gram of 18ct Gold increased by Rs 66 to Rs 8,395.

Markets Eye 25 bps Rate Cut From Fed

Market participants and analysts are widely expecting a 25-basis point rate cut from the American central bank. Manav Modi, Analyst – Precious Metal - Research, Motilal Oswal Financial Services, says, "A 25 bps rate cut is expected after a long pause."

Ankita Pathak, Macro Strategist and Global Equities Fund Advisor at Ionic Asset, too, thinks the "Fed is on track to cut 25 bps this week which has already been priced in by the markets."

According to the CME FedWatch Tool, 96.1 per cent of traders are pricing in a 25-bps rate cut.

"In this week's policy meeting, along with Powell's statement, dot plot and economic forecasts will also be important to watch for," added Modi.

Falling US Dollar Adds To Gold's Rally

A declining US dollar is also supporting Gold prices. The US dollar index, which measures the greenback against a basket of six major currencies, is trading near its 10-week low at 96.67. Since August beginning the index is on a declining trend, having fallen over 3 per cent.

A falling dollar makes Gold more affordable for global buyers and increases its appeal as a safe-haven, supporting prices.

Other Factors Supporting Gold Prices

Gold prices are further gaining support from continued geopolitical tensions in the West Asia and Russia-Ukraine, higher inflows into Gold-backed exchanged traded funds (ETFs), and uncertainty driven by US President Donald Trump's attempts to influence Fed policy.