In India, the price of 24-karat gold stood at ₹10,686 per gram, while 22-karat gold was priced at ₹9,795 per gram. For 18-karat (999) gold, prices were at ₹8,014 per gram, according to Goodreturns.
Why gold is rallying?Several global and domestic factors are driving the bullion rally:
US interest rate cut expectations
Traders now see a 97% probability of a 25-basis-point rate cut at the U.S. Federal Reserve’s policy meeting on September 17, up from 92% earlier, according to CME FedWatch data. Non-yielding assets like gold tend to perform well in a low-interest-rate environment.
Weak labor market data
The US Labor Department reported job openings at 7.181 million in July, lower than expected. This softer labor market reinforced the case for policy easing. The upcoming non-farm payrolls data on Friday (September 5), expected to show 78,000 job additions, is now in sharp focus.
Safe-haven demand
Uncertainty over US trade policies also adds to bullion’s appeal. US President Donald Trump recently suggested that the US may have to unwind trade deals with major partners, including the EU, Japan, and South Korea, if it loses a Supreme Court case involving tariffs.Global reserve shifts
According to NS Ramaswamy of Ventura, central banks are deliberately reshaping their foreign exchange reserves by increasing exposure to gold. This structural change is supporting sustained upward momentum, pushing futures beyond the $3,600 an ounce mark.
Dollar weakness
Weaker US labor data pulled the dollar index lower this week, making gold cheaper for investors holding other currencies and fuelling demand.
Outlook
Analysts agree that gold’s near-term direction will depend on upcoming US jobs data and the Fed’s September policy decision. While profit-taking may cause temporary pullbacks, structural drivers such as rate cuts, global trade uncertainty, and central bank buying are likely to keep gold supported at elevated levels.
Darshan Desai, CEO, Aspect Bullion & Refinery, said, “With markets pricing in a near 100% chance of a rate cut by the FOMC on September 17, gold is expected to find strong support at lower levels. On the domestic front, the decision to keep GST rates unchanged on gold and silver offers much-needed clarity for bullion and jewellery traders ahead of the key festive season. This also brings reassurance to potential buyers who may have been holding back in anticipation of further policy updates.”
Aksha Kamboj, Vice President, India Bullion & Jewellers Association (IBJA) and Executive Chairperson, Aspect Global Ventures, added, “Given the sustained upward trend and limited downside, our outlook suggests that price stability may persist in the short term. While speculative traders remain active, long-term investors view current levels as a reasonable entry point for preserving wealth. Overall, the trajectory for gold continues its upward march, rooted in a confluence of macroeconomic uncertainty and investor confidence in the metal’s intrinsic value.”
