Gold Prices Hit One-Month High Despite Strong US Dollar; MCX Gold Eyes Record Levels
Gold price today: MCX gold rate finished at ₹79,019 per 10 gm on Friday, logging a weekly gain of around 0.80%
January 18, 2025: Gold prices in both domestic and international markets continued their upward momentum over the past week, even as the US dollar strengthened. On Friday, the MCX gold rate closed at ₹79,019 per 10 grams, marking a 0.80% weekly gain compared to ₹78,400 last week. In the international market, COMEX gold settled at $2,748.70 per troy ounce, while spot gold ended at $2,701.55 per ounce.
Experts attribute the rally to the weakening Indian Rupee (INR) and market optimism about upcoming US Federal Reserve rate cuts, bolstered by softer US inflation and retail sales data for December 2024. Speculation is also rife about potential policy changes following Donald Trump’s inauguration as the 47th US President on January 20, 2025.
Key Drivers of the MCX Gold Rally
- US Core Inflation Decline:
According to Sugandha Sachdeva, Founder of SS WealthStreet, gold prices sustained gains despite a stronger US dollar due to declining US core inflation, which fell to 3.2% in December from a six-month average of 3.4%. Lower inflation and softer retail sales data bolstered hopes of a dovish Fed stance. - US Treasury Yields and Fed Rate Speculation:
Kaynat Chainwala, AVP-Commodity Research at Kotak Securities, noted a decline in US Treasury yields, further fueling expectations of two Fed rate cuts by the end of 2025. Unemployment claims also exceeded forecasts, further supporting rate cut speculation. - Economic Uncertainty Around Trump’s Policies:
The markets are closely monitoring Donald Trump’s upcoming inauguration, with potential policy shifts likely to influence inflation, a key driver for gold prices. - INR Weakness Boosts MCX Gold Prices:
The depreciation of the Indian Rupee added extra momentum to domestic gold prices, allowing MCX rates to outperform global gold price gains.
Technical Analysis and Levels to Watch
Gold prices tested resistance at $2,725 per ounce in international markets. A break above this level could trigger further buying interest, while a dip below $2,660 per ounce may lead to corrections.
In the domestic market, gold prices closed near ₹79,200 per 10 grams, a key resistance level. According to Sugandha Sachdeva, a breach of this level could lead to record highs, while failure to break it might trigger a downward correction.
MCX Gold price today
Despite soaring US dollar rates, gold prices in the domestic and international markets continued to scale northward in the week gone by. The MCX gold rate finished at ₹79,019 per 10 gm on Friday, logging around 0.80 per cent weekly gain against the previous Friday’s close of ₹78,400 per 10 gm. In the international market, COMEX gold price finished at $2,748.70 per troy ounce, while spot gold prices ended at 2,701.55 per ounce.
According to experts, the MCX gold rate registered a weekly gain of 0.80 per cent. In contrast, international gold prices could register only a 0.50 per cent weekly gain as weakness in the Indian National Rupee (INR) added some extra fuel to MCX gold rates’ rally. They said that gold rates today are on an uptrend despite the soaring US dollar as the market expects a US Fed rate cut triggered after the softening of US inflation and retail sales data for December 2025. They said that investors are waiting for the inauguration of Donald Trump as the 47th US president, scheduled for 20 January 2025, and his outlook for the US economy to contain inflation.
Triggers for gold price rally
On why gold rate today is rising despite soaring US dollar prices, Sugandha Sachdeva, Founder of SS WealthStreet, said, “Despite a stronger US dollar, gold sustained its upward trajectory as US core inflation softened to 3.2 per cent in December, down from an average of 3.4 per cent over the previous six months. Easing inflationary pressures and soft retail sales data for December fueled speculation about the US Federal Reserve’s interest rate trajectory, lending additional support to gold prices. Adding to the bullish sentiment, a decline in the US 10-year Treasury yield enhanced gold’s appeal as an investment asset.”
Uncertainty ahead of Donald Trump’s oath date
Speaking on the reasons that fueled MCX gold rates despite the strong US dollar and US Fed not being in a hurry to cut interest rates, Anuj Gupta, Head — Commodity & Currency at HDFC Securities, said, “Despite soaring US dollar against the major global currencies in the Forex market, market is expecting rate cut in upcoming US Fed meeting this month end after softening US inflation and retail sales data for December 2024, which fueled MCX gold rate for the fourth week in a row. The economic uncertainties surrounding Donald Trump’s oath date (20 January 2025) and the INR’s free fall also supported the gold price rally.”
On how the gold price movement is connected to Donald Trump, Sugandha Sachdeva said, “The market participants will closely monitor President-elect Trump’s inauguration ceremony, given the potential policy shifts and their impact on inflation-a key driver for gold prices. Additionally, the release of US economic indicators, such as the flash manufacturing and services PMI, is expected to influence the yellow metal’s trajectory.”
US Fed rate cut buzz
Pointing towards the renewed US Fed rate cut optimism, Kaynat Chainwala, AVP-Commodity Research at Kotak Securities, said, “The US Treasury yields softened owing to US economic data that bolstered expectations the Federal Reserve could lower interest rates this year. US unemployment claims rose to 217K for the week ending January 11, above the forecast of 210K, while December retail sales increased by 0.4%, below the expected 0.6%.
These figures and softer-than-expected inflation data sparked speculation of two Fed rate cuts by the end of 2025, possibly starting in June. Fed Governor Christopher Waller further stoked this optimism, indicating that if economic data weakens, the central bank might implement three or four rate cuts this year.”
With Thanks and Reference to:https://liveindia.tv/business/gold-prices-hit-one-month-high-despite-strong-us-dollar-mcx-gold-eyes-record-levels/ and https://www.livemint.com/market/commodities/gold-price-today-mcx-gold-rate-hits-one-month-high-despite-soaring-us-dollar-rate-us-fed-rate-cut-inflation-in-focus-11737164438888.html
