Gold Price Just Above Month's Low, Global Rates Nosedive After US Fed Rate Cut
Gold price today fell following the global rates, that took a plunge after the US Fed cut rates.
Gold price today stood at Rs 76,780 as of 7:00 a.m., according to the India Bullion Association, following the global rates that took a plunge after the US Fed cut rates. The price, after falling by Rs 210, is now hovering closer to the month's low that was recorded on Dec. 5. It had dipped to Rs 76,520, before holding above Rs 76,730 till this week. Gold rates had topped the previous month's high on Wednesday.
The global price saw this movement, after the US Federal Reserve cut the repo rates by 25 bps. The domestic markets have followed suit and seen some volatility in prices due to this change.
The global prices had been on a decline but held steady ahead of the rate cut, before dipping. The immediate dip in demand is pushed by the reduction of uncertainty as the the reduced rates and the trajectory for lower cuts in the future brings clarity.
Investors tend to consider the yellow metal a safe-haven investment when there is geo-political uncertainties or economic crisis. The reduced rates call a clearer signal of the Federal Reserve's stance and plans, also reducing the need for safe-play investments.
The futures prices for Feb. 5, 2025 stood at Rs 76,664 per 10 grams, according to the Multi Commodity Exchange.
Global Rates
Global rates of gold stood at $2,594, according to the World Gold Council. The commodity fell to the lowest price in a month after the Federal Reserve reduced interest rates from 4.25% to 4%. There was also a forecast of less monetary easing for 2025, according to Bloomberg. The US Fed cut rates for the third consecutive time before they signaled a more cautious approach on further reductions of the rates.
Spot gold was 1.1% lower at $2,617.50 an ounce as of 2:09 p.m. in New York. Silver, palladium and platinum were all lower. Treasury yields and the dollar surged after the rate decision, sending bullion down by as much as 1.6%, according to Bloomberg.
Silver Prices
The silver price stood at Rs 90,370 as of 7:00 a.m., according to the India Bullion Association. The futures prices for Feb. 5, 2025 stood at Rs 90,406, according to the MCX.
