New Delhi: Gold prices are expected to maintain a positive long-term bias as global and domestic factors converge to support the yellow metal, according to Praveen Singh, Senior Fundamental Research Analyst – Currencies and Commodities at Mirae Asset Sharekhan. The analyst suggests that dips and corrections should be seen as buying opportunities, with targets of $3,800–$3,850 in the near term and a long-term objective of $4,000.
Strong weekly performance
Spot gold closed with a robust gain of 1.1% at $3,685 on Friday, marking its fifth consecutive weekly advance. The rally continued into Monday, with gold trading at $3,743, up 1.57% at the time of writing. On the Multi Commodity Exchange (MCX), the October gold contract surged nearly 2% to ₹1,12,200.
The gains were largely attributed to expectations of aggressive monetary easing by the US Federal Reserve following its September 17 policy meeting.
Fed Governor Miran’s dovish stance
Markets have been particularly buoyed by comments from newly appointed Fed Governor Stephen Miran, who has advocated deeper rate cuts than the central bank’s median outlook. Miran dissented at the September 17 meeting, calling for a 50-bps cut and pushing for a cumulative reduction of 1.25 percentage points in the remaining two meetings this year, against the Fed’s current guidance of 50-bps.
Speaking at the Economic Club of New York on September 22, Miran argued that structural factors such as reduced immigration, higher tariff revenues, and an ageing population have lowered the neutral interest rate. He suggested that policy rates should be closer to 2.5% instead of the current 4–4.25%.
His stance provided fresh momentum to gold prices, although other Fed officials remain cautious. St. Louis Fed President Musalem noted limited scope for further cuts, while Atlanta Fed President Bostic expressed hesitance about supporting another October reduction, citing persistent inflation.
Key events and data to watch
Markets are now awaiting remarks from Fed Chair Jerome Powell, who is scheduled to speak on the economic outlook on September 23 in Rhode Island. Other critical data this week includes US PMIs (September 23), new home sales (September 24), Q2 GDP tertiary estimate (September 25), PCE Price Index (September 26), and consumer sentiment surveys (September 26).
On the geopolitical front, US President Donald Trump will address the UN General Assembly on September 22, with global leaders including Ukraine’s President Zelenskiy expected to hold key discussions on the sidelines.
Support from ETF flows
Investor appetite for gold remains strong, with global gold ETF holdings reaching 95.83 million ounces as of September 19 — the highest since May 2022. ETF holdings have risen for four consecutive weeks and are up 15.66% year-to-date, reflecting heightened investor demand for safe-haven assets.
Global economic backdrop
Argentina’s fiscal turmoil, marked by a weakening peso and upcoming debt repayments worth $9.5 billion next year, has added to global financial instability, further bolstering gold’s safe-haven appeal. Meanwhile, France has faced consecutive credit rating downgrades amid political and fiscal pressures, another factor adding to risk-off sentiment.
The US Dollar Index, after a three-day rally, declined to 97.39 on September 22, down 0.3%. However, US 10-year bond yields rose to 4.13%, while 2-year yields inched up to 3.586%, providing a counterweight to gold’s rally.
Indian rupee under pressure
In India, the rupee has faced headwinds due to concerns over H1 visa fee hikes and broader global uncertainties. A weaker rupee has further supported domestic gold prices, with MCX contracts rising in tandem with international trends.
Gold price outlook
According to Singh, gold is supported by a confluence of bullish factors — dovish Fed signals, geopolitical risks, fiscal uncertainty in major economies, and sustained ETF inflows. While Powell’s upcoming speech may introduce a hawkish element, the broader outlook remains constructive.
“Buy on dips remains the preferred strategy,” Singh said, identifying support at $3,700 (₹1,10,900) and $3,650 (₹1,09,400). Resistance levels are seen at $3,775 (₹1,13,200), $3,800 (₹1,13,900), and $3,850 (₹1,15,400).
With MCX gold rates tracking the USD/INR at 88.29, domestic investors are advised to monitor both currency movements and global central bank signals for near-term cues.