Gold on MCX hit a record high of ?1,14,179 per 10g, supported by strong macro and geopolitical factors by Amit Gupta, Kedia Advisory
* Expectations of aggressive U.S. rate cuts have boosted safe-haven demand, with Governor Stephen Miran warning that policy is too tight and risks the job market.
* The CME FedWatch tool indicates a 90% probability of a cut in October and 73% chance in December, reinforcing investor conviction. Lower interest rate outlook has enhanced gold’s appeal as a non-yielding asset.
* Geopolitical tensions also supported bullion after NATO vowed measures against Russia’s violation of Estonian airspace.
* ETF inflows reached a three-year high last week, adding to institutional demand.
* Central banks resumed buying, with 63 tonnes added, aligning with post-2022 averages.
* Seasonal weakness in UK demand is reversing, lifting sentiment, also Indian Festive demand is there but limited due to rise in prices.
* China’s August gold imports slipped 3.4% MoM to 97.58 MT, showing some softness in physical demand.
Overall, a mix of expected Fed easing, ETF inflows, central bank purchases, and geopolitical risks has created a strong base for gold’s record-setting rally. In the past one year, we have already seen a +50% gain in gold prices, further supported by rupee weakness, making gold the best-performing asset class. However, with risk-on sentiment from here, it is advisable to watch carefully as a technical pullback or time correction of 8-10% in gold is can't be ruled out.
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