Gold Prices Near Diwali Record as Fed Rate-Cut Hopes Boost Demand

Gold Prices Edge Toward Record Levels

Gold prices rose on December 2, trading strongly at Rs 1,31,000 per 10 grams, nearing the previous peak of Rs 1,32,250, which was recorded just before Diwali. The increase reflects renewed optimism among investors driven by expectations of upcoming interest rate cuts from the US Federal Reserve.

Market Context

Analysts attribute the recent rally to weaker-than-expected US economic indicators and growing market sentiment that the Fed may begin relaxing its monetary policy sooner than anticipated. Lower interest rates typically decrease the opportunity cost of holding non-yielding assets like gold, thereby improving demand.

Domestic and Global Trends

In India, the surge coincides with sustained festive and wedding season demand, further supporting local prices. Internationally, spot gold prices have also shown strength amid a weakening dollar and declining US bond yields. Traders remain watchful for forthcoming US employment data and Fed statements that could shape the metal’s short-term direction.

“Gold remains in a bullish zone with expectations centered around policy easing by the Fed,” said a commodity market analyst.

Outlook

Experts suggest that if the Fed confirms a dovish stance, domestic prices could breach previous highs. However, profit-taking at elevated levels may lead to near-term volatility.

Author’s summary: Gold prices stayed firm at Rs 1,31,000 on December 2, approaching Diwali peaks as global anticipation of Fed rate cuts fueled investor momentum.

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Moneycontrol Moneycontrol — 2025-12-01

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