Gold Maintains Stability Amid Fed Rate Hike Uncertainty

Published on Sep 04, 2023 13:47

Gold prices held steady above $1,970 per ounce, reaching their highest levels in a month. This was driven by indications of a cooling US economy, fuelling optimism that the Federal Reserve may abstain from raising interest rates further this year. In the most recent US jobs report, the unemployment rate unexpectedly rose to 3.8% in August. Despite the US economy adding 187,000 jobs, it remained below the 200,000 benchmark for the third consecutive month, signalling a gradual labour market slowdown.

Furthermore, data from the Institute for Supply Management (ISM) showed that US manufacturing activity improved in August but continued to contract for the tenth consecutive month. These developments have led the financial markets to increasingly speculate that the Federal Reserve will maintain its current interest rates this month and possibly refrain from any further rate hikes for the remainder of the year.

MCX Bullion futures were last seen trading at Rs 59500 levels up Rs 105 per 10 grams. Last week the counter ended up 1.3% or Rs 755, hitting the high of Rs 59665. This week the counter should face resistance near Rs 59700-900 levels and support near Rs 59100 levels.