Gold prices reached a new lifetime high of ₹1,13,100 per 10 grams in Delhi markets, rising ₹100 due to sustained buying by stockists. However, on the Multi Commodity Exchange (MCX), gold prices continued their downward trend for the second consecutive session as investors eagerly anticipate the release of US inflation data.

Market Performance

Gold October futures on the MCX witnessed a decline of 0.29%, settling at ₹58,675.00 per 10 grams. Similarly, silver December futures experienced a marginal drop of 0.12%, closing at ₹75,026.00 per kg. In contrast, gold of 99.5% purity advanced ₹100 to a record ₹1,12,600 per 10 grams in Delhi markets.

Factors Influencing the Market

The recent dip in gold prices on MCX can be attributed to several factors:

1. Profit Booking: Market analysts suggest that traders are engaging in profit-taking activities ahead of the crucial Consumer Price Index (CPI) data release.

2. Unexpected PPI Data: Surprisingly, the US PPI data showed an unexpected fall of 0.1% in August, contrary to the anticipated 0.3% gain. Despite this supportive data, gold prices continued to decline.

3. US Dollar Strength: The US Dollar Index saw a slight increase of 0.04%, reaching 104.82, which typically puts pressure on gold prices.

Supporting Factors for Precious Metals

Despite the current decline on MCX, several factors continue to provide support for precious metals:

• Ongoing geopolitical tensions
• Sustained central bank buying
• Expectations of potential Federal Reserve rate cuts
• Escalated market risks including inflationary worries
• Mounting public debt
• Weakening US growth
• Strong ETF inflows

Record Highs and Long-Term Outlook

The precious metal has surged ₹34,150 or 43.25% from ₹78,950 per 10 grams in Delhi markets. Industry experts expect demand to remain resilient despite elevated rates. Global economic uncertainty, strong investor appetite, and expectations of looser US monetary policy are driving the rally.

Internationally, spot gold traded 0.52% lower at $3,621.91 per ounce, while spot silver slipped 0.35% to $41.01 per ounce. Investors await the US consumer inflation report which could influence the Federal Reserve's anticipated interest rate cut.

Market Projections and Trading Recommendations

Analysts foresee continued volatility in the precious metals market this week. Projections suggest:

Market experts have provided the following trading suggestions:

1. Gold: Recommend booking profits on existing positions
2. Silver: Consider buying around ₹74,600.00, with appropriate stop-loss and target levels

Buying Strategy

Experts recommend a staggered purchase strategy over lump-sum buying to average costs and reduce short-term risk. This approach is particularly relevant given the current market volatility and the long-term bullish outlook for gold.

Cultural Significance

Industry leaders emphasize that while periodic corrections are natural, broader fundamentals including safe-haven demand and festival buying patterns continue to support prices. Cultural factors also play a significant role, as gold represents both investment and emotional value tied to Indian traditions and celebrations.

As the market awaits the US inflation data, traders and investors are advised to stay vigilant and adjust their strategies according to the evolving market conditions, while keeping in mind the long-term potential of gold as both an investment and a cultural asset.

Gold prices have maintained their strong position, trading near $2,623.00 an ounce, just shy of the recent record high of $2,674.00. The precious metal's resilience comes amidst a confluence of economic data and geopolitical factors that continue to shape market sentiment.

Bullish Outlook and Price Projections

JM Financial's Rahul Sharma forecasts that gold prices could extend by another 10% from current levels, though he warns of a high likelihood for price or time correction afterward. Sharma notes:

• Gold is extremely overbought on monthly charts with RSI above 88
• Prices have surged 98.84% over the past 23 months
• Expectations of modest gains or range-bound movement in the near future
• Potential for stronger upside later, with prices possibly testing $4,000

Central Bank Purchases and Global Reserves

Central banks are expected to purchase around 900 tonnes of gold, significantly above the pre-2022 average of 500-600 tonnes. Key buyers include China, India, Poland, and Turkey. Global reserves now stand at approximately 36,200 tonnes, representing 20% of total reserves.

ETF Inflows and Market Drivers

Gold ETFs have recorded significant inflows:

• 397 tonnes of inflows in recent months
• Total holdings reached 3,616 tonnes
• Driven by geopolitics, U.S. policy risks, and inflation fears
• Chinese ETF holdings increased 70% year-to-date

Economic Indicators and Fed Policy

• Fed funds rate: 4.25-4.50%
• Markets expecting approximately 50 basis points of cuts
• U.S. CPI: 2.9%
• Potential for tariffs or supply shocks to push inflation above 5%

Geopolitical Tensions and Market Uncertainty

The gold market has also found support from ongoing geopolitical tensions, including:

• Israel's military strike against Hamas leaders in Doha
• President Trump's statements regarding potential tariffs on India and China

These events have contributed to the overall uncertainty in global markets, typically a favorable condition for gold as a safe-haven asset.

Market Outlook

The bullish sentiment for gold remains strong, supported by various factors:

• Continued geopolitical tensions
• Expectations of a more dovish Federal Reserve stance
• Potential weakening of the US dollar

As markets await upcoming US inflation data and the Federal Reserve's decision, gold's performance continues to captivate investors and analysts. The interplay of economic indicators, geopolitical events, and monetary policy expectations will likely remain key drivers for the precious metal's price in the near term.