Kolkata: Gold came under pressure in India Thursday morning, but reversed the trend in the afternoon after international prices rose by $18 a troy ounce as the market felt the impact of the first interest rate cut by the US Federal Reserve in more than four years.
Prices moved up to Rs 73,450 per 10 gm in the Indian market from Rs 73,000 in the morning hours. Jewellers said consumers are booking gold for Navratri but will not take delivery now as the Shradh period, considered to be inauspicious by many Hindus, has started Thursday.
Traders said prices may move up in the coming weeks, because of which customers have started booking the yellow metal.
While the market may witness some slowdown in demand for a brief period due to Shradh, they are certain that the demand will remain upbeat for the remainder of the festive period, said Colin Shah, MD of Mumbai-based Kama Jewellery. “Overall, we look forward to a strong festive season with a 10-15% rise in demand as compared to last year and the gold price to scale $2,650 per troy ounce at the global level and Rs 78,000 domestically,” he said.
The Federal Reserve cut interest rate by 50 basis points Wednesday, marking its first reduction since 2020.
The Fed has projected two additional 25-basis-point cuts in 2024, as the US central bank grows more confident about inflation aligning with its 2% target.
“Now there is a clear-cut signal from the Fed on rate cut. In this scenario, gold prices are bound to go up. Consumers are now seeing that the impact of duty cut has withered away, and they are gradually returning to the market to buy gold for the upcoming wedding season. Pre-booking of gold has picked up in the last ten days,” said Suvankar Sen, MD and CEO of Senco Gold & Diamonds.
