Gold’s historic rally may soon face turbulence, with analysts warning of volatility as global and domestic factors converge.
Last week, the most-traded October contract on MCX surged to an all-time high of ₹1,04,090 per 10 grams, before easing slightly. The rally was boosted by a weaker rupee, which closed at a record 88.09 against the US dollar, amid heavy foreign outflows and rising concerns over India-US trade relations.
According to Pranav Mer, VP of Commodity & Currency Research at JM Financial Services, the focus this week will be on key macroeconomic data. “Global PMI releases, the US jobs report, and political developments will shape sentiment. While some profit booking is likely, gold still has upside potential towards ₹1,08,000–₹1,10,000 per 10 grams in the short term,” he said.
Aksha Kamboj, VP of the India Bullion and Jewellers Association, added that the rupee’s persistent weakness is supporting domestic bullion. “As long as the rupee remains under pressure, gold is expected to stay above ₹1 lakh per 10 grams,” she noted.
On the international front, Comex gold futures (December) ended 1.2% higher at $3,530.70/oz, close to the record $3,534.10 touched on August 8. International bullion has gained nearly 6.6% since August 20, said Prathamesh Mallya of Angel One. However, he cautioned about near-term corrections, with the dollar index hovering near the crucial 100 level.
Adding to the uncertainty, Fed Chair Jerome Powell’s comments on labour market risks have strengthened expectations of a rate cut at the upcoming September 16–17 meeting. Political tensions, including former President Trump’s attempt to oust a Fed governor, have further clouded market sentiment.
Analysts agree that while the long-term outlook for gold remains strong, driven by monetary easing prospects and upcoming festive demand in India, sharp short-term swings are likely as investors navigate global uncertainties.
