After rising steadily for the past two weeks, gold prices suddenly fell today, August 25th. The price of gold has fallen internationally due to the strengthening of the US dollar and investors keeping an eye on the Federal Reserve's policies. However, prices may remain b due to potential interest rate cuts and festive demand in the Indian market.
Gold Price Today: Gold, which had been steadily rising for the past two weeks, traded with a sudden decline on August 25th. In the international market (COMEX), gold fell by 0.26% to $3409.70 per ounce, while silver fell by 0.65% to $38.80 per ounce. The biggest reason for this is the strengthening of the US dollar. However, expectations of the upcoming Federal Reserve (US Fed) meeting and potential interest rate cuts are still attracting investors to the gold market. In India, jewelers have also started purchasing before the festive season, which could support local demand.
US Dollar Strength Puts Pressure on Gold
On Monday, the US Dollar Index strengthened in the global market, putting pressure on gold. Generally, when the dollar strengthens, gold prices fall because buying gold in dollars becomes more expensive.
The US Dollar Index was recently at a four-week low, but now it is up by 0.2%. This strength has had a direct impact on gold prices, and gold has become cheaper.
Gold Price Today - Latest Updates
- On COMEX, gold fell by 0.26% to $3409.70 per ounce.
- The price of silver also fell by 0.65% to $38.80 per ounce.
In India, on the Multi Commodity Exchange (MCX), gold rose by 1% to ₹1,00,391 per 10 grams last week. But now, due to the strengthening of the dollar and weakening demand, a decline is being seen in it.
Gold Price in the Indian Market
Just last week, on the Multi Commodity Exchange (MCX), gold reached a level of ₹1,00,391 per 10 grams, up 1%. This level is considered psychologically important for gold investors. If expectations of a Fed rate cut strengthen further, gold prices could cross ₹1,02,000 per 10 grams.
Impact of the Federal Reserve and Interest Rates
The monetary policy of the US Federal Reserve (US Fed) has always had a profound impact on gold prices. Recently, Federal Reserve Chairman Jerome Powell has adopted a dovish stance, raising market expectations that interest rates may be cut at the September meeting.
According to the CME FedWatch Tool:
The probability of a 25 basis point (0.25%) cut at the September 17 policy meeting has reached 87%.
A total of 48 basis points of rate cuts may occur by the end of this year.
Expectations of lower interest rates are a positive signal for gold. This is because when interest rates are low, investors are more attracted to safe havens like gold.
Gold Demand Sluggish in Asian Markets
Physical gold demand remained weak in Asian markets last week. This was due to constant price fluctuations. When prices remain highly volatile, general buyers and jewelers refrain from buying.
However, the situation was slightly different in India. Here, jewelers have started buying again before the major festive season. It is believed that physical gold demand will increase further in the coming weeks due to major festivals like Navratri and Diwali.
