Gold price prediction today: Will gold rate continue to hit new lifetime highs in the near-term? Here’s the outlook

Gold price prediction: Gold prices may correct but the downside would be limited, and the bull run is expected to continue, says Maneesh Sharma, AVP – Commodities & Currencies, Anand Rathi Shares and Stock Brokers. He shares his views and recommendations for gold and silver investors:The Fed lowered its federal funds rate target range by 25 basis points to 4.00%-4.25% at its September meeting and indicated another 50 basis points of rate cuts by the end of the year. Markets are now pricing in about a 90% chance of a 25 basis point Fed rate cut in October and a 75% chance of another 25 bps cut in December.In domestic markets, with Indian Rupee also tumbling to record lows, Gold prices surged to fresh lifetime highs supported by robust festive demand in India & a weaker US dollar. In domestic markets, 24-carat gold climbed to around Rs 117,500 per 10 grams in Mumbai, while 22-carat gold was quoted near Rs 105,000. Silver also joined the rally, trading above Rs 1,40,000 per kg in some markets.Other key factors driving the Gold price rally are listed below:Festive season demand in India: The start of the Navratri festival has lifted jewellery buying, traditionally considered auspicious in Indian households. Seasonal purchases, coupled with advance buying for upcoming Diwali and wedding season, have kept physical demand strong despite elevated price levels. The Indian Government has pushed ahead with GST reform which has been implemented from 22nd Sept and could drive a major consumption surge in domestic markets.Weakness in the US dollar: A softer U.S. dollar has added momentum to bullion’s rally, making gold more affordable for buyers holding other currencies and fuelLing investment demand worldwide.Safe-haven appeal: Expectations of slowdown in global economic growth with likely Stagflationary scenario & ongoing geopolitical tensions are pushing investors toward gold as a safe-haven asset. Gold’s role as a hedge against inflation & currency fluctuations is once again in focus.Investment flows into gold ETFs: These remain strong, with speculators also increasing long positions in the futures market. The global risk sentiment is supporting sustained inflows into bullion. Riding on gold’s momentum, silver prices had also rallied sharply, with industrial demand and festive purchases adding to the uptrend.Global de dollarization moves: With central banks having diversified aggressively into bullion since 2022, post russia Ukraine conflict, it had pushed global gold holding to record levels as share of gold reserves by all central banks excluding US have increased to almost 27 – 28 % of global Fx reserves, while share of US treasuries in Fx reserves have fallen to below 25 % as of End August.On the domestic consumption front, affordability concerns could slow momentum if prices rise much further from current levels, although cultural demand remains resilient. Gold is increasingly being seen as a hedge in portfolios in the investment front, especially as equity markets stay volatile and bond yields fall. As far as the inflation outlook is concerned, the ability of manufacturers and traders to pass on high prices will influence wider inflation trends in India, especially if the rupee weakens further.Gold Price Weekly OutlookAlthough the momentum remains bullish, chances of a correction still persist but to remain limited in nature. However, a strong rally in domestic gold prices could continue to push up imports, which could weigh on India’s current account balance on a long run unless offset by strong exports elsewhere. Also, any unexpected hawkish signals from the Fed or profit-booking by investors could trigger volatility in prices at higher levels. Prices could extend its upward trajectory to Rs 114,500 – Rs 115,300 per 10 grams in MCX futures markets and US$ 3,820 – 3850 per oz in global Spot trade.Silver upside levels to target remain $ 45 – 46 per oz in Spot, translating to Rs. 1,37,000 – 1,38,000 per Kg in MCX futures market. Meanwhile as long as festive demand stays strong & monetary policy expectations remain dovish chances of major corrective moves looks minimal, as Gold & Silver could continue testing new highs in coming days.(Disclaimer: Recommendations and views on the stock market and other asset classes given by experts are their own. These opinions do not represent the views of The Times of India)