Gold Futures Price At All-Time High Has Analysts Uncertain On Pause

Gold prices have seen a steady increase since the Fed cut rates on Sept. 18. Gold rates in India, according to Bullions, stood at Rs 75,420 per 10 grams as of 8:20 a.m. on Wednesday. The international prices and futures prices are at the highest ever rates.

International prices are just shy of highest rates, standing at $2,664 per ounce, according to Bloomberg.

The yellow metal had traded 0.46% up at Rs 74,492 on Sept. 23, and the successive record highs continued with prices holding strong. The futures prices also followed suit of the upward trend.

The futures price for Oct. 4 is at Rs 75,003, according to Bloomberg, marking a record high as prices hit Rs 75,000.

Price Pause Post The Rally?

The question of a slip in prices comes in as the yellow metal continues hitting record high prices. The outlook on gold prices is slightly uncertain, according to commodity analysts.

"If the base of rate cut continues, the prices could continue to shoot up. However, there could be a pause around 2,700 dollars," said Navneet Damani, head - research commodities and currency, Motilal Oswal.

"What we are seeing today is exuberance, but when the market is in exuberance, we do not know when its going to pause. It might go a couple percent higher before it pauses," he said.

Long-Term Outlook

The rally may or may not continue, but the long-term upside on gold will not be impacted by the short-term slips in prices.

"Rate cuts and geopolitical tensions are high and we are expecting that the dollar index will move down again. This price hike is triggered by safe haven buying," said Vandana Bharati, head of commodity research at SMC Global.

"I have seen the commitment of traders' data, and non-commercial stipulators, along with other participants, have increased their buy position in gold," she said.

When it comes to outlook, Bharati does not anticipate significant corrections in the near future.

"People will continue to buy gold. There is also an increase in buying gold for ETFs, after a pause," she said.