'Gold Price At Rs 96,000 In 6-9 Months': Where Bullion Is Headed Next After Fed Guidance

The US Federal Reserve's latest policy guidance pushed gold rates to a record high, as the American monetary policy authority projected two likely rate cuts in the year ahead despite looming economic uncertainties.

While the Fed kept the benchmark rates steady at 4.25-4.5%, it projected a potential cumulative reduction of 50 basis points by 2025-end. Also, Fed Chair Jerome Powell underlined that "uncertainty around the economic outlook has increased".

This is likely to serve as a double booster dose for gold. The non-yielding bullion generally rises with the prospects of low-rate environment, and the fears around economic uncertainty will further boost its appeal among safe-haven buyers.

In the early hours of Thursday, spot gold peaked to an all-time record high of $3,057.21 an ounce, rising by more than 1% from the preceding day's close. The trend reflected on India's Multi Commodity Exchange as well, where gold futures rose over 0.4% to a record Rs 89,796 per 10 grams after the trading session opened.

Although Fed was earlier expected to cut rates thrice during the remainder of 2025, the projection of two rate cuts was sufficient to cheer the bullion market as this comes amid a potential uptick in inflation and escalation of trade tensions.

"Gold prices are likely to trade higher as the Fed hinted at two possible interest rate cuts this year boosting bullion's appeal amid ongoing geopolitical and economic tensions," said Prathamesh Mallya, deputy vice president for research of non-agricultural commodities and currencies at Angel One Ltd.

Medium-Term Outlook

Unlike several experts who have voiced fears of recession hitting the US in the months to come, Powell did not make such a gloomy projection. The Fed chief, however, marked his concern over import tariffs that may fuel inflation and add to the growing economic uncertainties.

"The committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the committee's goals," Federal Open Market Committee said in its statement.

The mention of risks and economic uncertainty serves as a catalyst for the price of gold, which is a top safe-haven asset, analysts underlined.

"In an environment marked by recession fears and relentless market uncertainty, gold will continue to shine as the ultimate safe-haven asset," said Kaynat Chainwala, assistant vice president for commodity research at Kotak Securities Ltd, while responding to NDTV Profit's queries.

Over the next six to nine months, gold rally can extend to Rs 96,000 per 10 grams on the MCX, she said. On the New York-based Commodity Exchange, it can rise to $3,300 an ounce.

The key support levels in the medium term would be $2850 per ounce on Comex and Rs 84,000 per 10 grams on MCX, the analyst added.

Rahul Kalantri, vice president - commodities at Mehta Equities Ltd., said gold's range in the medium term is expected to be between $2,880 and $3,142. The analyst believes that providing price levels in rupee terms is challenging due to volatility in rupee-dollar conversion rates.

Gold typically performs well during economic crises, driven by a flight to safety as investors seek to protect their wealth from market volatility, Chainwala noted.

"Given its historical performance during times of geopolitical and economic uncertainty, gold is expected to maintain its strength in the coming months as the recession fears and global tensions persist," she said.