11 hrs ago
Gold Rally Extends After Fed Hike as Investors Assess Risks
Gold prices rose for a third day in a row.
The rise happened even after the US Federal Reserve increased interest rates.
Falling oil prices helped ease worries about inflation.
Lower bond yields also made gold more attractive.
The dollar rose only a little, which supported gold prices.
However, a stronger dollar can make gold more expensive for buyers using other currencies.
Analysts said prices could change quickly because interest rates and bond yields remain uncertain.
They suggested that long-term investors buy gradually instead of rushing into the rally.
MCX October gold rose ₹1,620 to ₹1,54,600 per 10 grams on September 18.
Gold has gained ₹3,791 over three sessions and is heading for a second straight weekly gain.
Falling crude prices, lower global bond yields and limited dollar gains supported the rebound.
The Federal Reserve raised rates by 25 basis points to 3.75%-4.00% on September 16.
Analysts advised staggered buying rather than chasing prices amid rate, yield and currency uncertainty.
- Who
- Gold investors, the Federal Reserve, and analysts Vikram Subburaj and Pinky Yadav.
- What
- Gold prices extended a three-day rally despite the Federal Reserve's 25-basis-point rate hike.
- Where
- On India's Multi Commodity Exchange and in global bullion markets.
- When
- Friday, September 18, following the Federal Reserve's September 16 policy decision.
- Why
- Falling crude prices, lower bond yields, limited dollar gains and increased Chinese gold reserves supported prices, while investors continued watching rates, currencies and geopolitical developments.
Reasons to Consider Buying
Reasons to Wait
Recent price momentum
Reasons to Consider Buying
Gold has gained for three consecutive sessions, recovered strongly from its monthly low and is on track for a second consecutive weekly gain.
Reasons to Wait
The rebound has occurred amid elevated volatility, and analysts cautioned investors against treating it as a signal to chase prices.
Market drivers
Reasons to Consider Buying
Falling crude prices, lower bond yields, limited dollar gains and increased Chinese gold reserves have supported bullion sentiment.
Reasons to Wait
Further US rate hikes, a dollar near a seven-week high, elevated Treasury yields and changing oil prices could pressure gold.
Investment approach
Reasons to Consider Buying
Long-term investors may use staggered buying to build allocations while managing volatility.
Reasons to Wait
Investors may wait for greater clarity on global rates and yields; leveraged traders were advised to reduce position sizes and use strict stop-losses.
Key facts
- MCX October gold
- Reached ₹1,54,600 per 10 grams after rising ₹1,620 on September 18.
- Three-day gain
- ₹3,791 per 10 grams.
- Monthly recovery
- ₹4,335 from the monthly low of ₹1,49,665.
- Federal Reserve rate
- Raised by 25 basis points to 3.75%-4.00% on September 16.
- US dollar
- The US Dollar Index remained near a seven-week high, with the dollar around 100.2 against a currency basket.
- US 10-year Treasury yield
- Remained close to 5%, according to Vikram Subburaj.
- Brent crude
- Was reported above $100 a barrel, despite a recent decline in crude prices.
Quotes
Pinky Yadav
Commodity fundamental analyst at Choice Broking
“Bullion prices gained support as falling crude oil prices relieved inflation pressures, driving bond yields lower. China bolstered sentiment by increasing gold reserves while paring U.S. Treasury holdings. Investors remain focused on Middle East developments and central bank policies as key drivers for precious metals.”
livemint.com
Sources
Related news
Gold Rises 12% This Month as Investors Weigh Buying Time
Gold Reaches Three-Month High as Rate Outlook Shifts
US-Iran Tensions Increase Gold Volatility Ahead Of Fed Decision
Gold Prices Fall Nearly 3% As Fed Hike Expectations Rise
Gold slips as oil rally boosts Fed hike bets
Gold Falls Sharply as Fed Rate-Hike Bets Rise
Iran War Drives Diesel Supply Losses Beyond Trump’s Claims
Italy’s debt burden rises as borrowing costs and tensions mount
Moody’s Raises India FY27 Growth Forecast to 7% Amid Risks
Trump Threatens 'Annihilation' as Iran Leaders Receive Visas
