Gold hits Rs 1,10,530 on MCX for first time ahead of Fed decision

Gold prices climbed to fresh record highs on the Multi Commodity Exchange (MCX) on Tuesday, supported by a weaker dollar and expectations of a US Federal Reserve rate cut. According to market data from MCX, both gold and silver extended gains in early trade, reflecting firm demand in domestic and global markets.

Gold and silver scale fresh peaks

MCX Gold October futures were trading 0.05 per cent higher at Rs 1,10,229 per 10 grams around 9:50 am. Gold futures with October expiry touched a lifetime high of Rs 1,10,530 for the first time, while December futures rose to Rs 1,11,450 per 10 grams. In the retail market, the price of 10 grams of 24k gold increased by Rs 870 to Rs 1,11,930.

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Silver also surged, with MCX December futures up 0.16 per cent at over Rs 1,30,000 per kg after touching a record high, underlining strong demand. Globally, spot gold rose 1.1 per cent to $3,680.80 per ounce, briefly hitting a new all-time high of $3,685.39. US gold futures for December delivery settled 0.8 per cent higher at $3,719.00.

Dollar slide, Fed expectations drive rally

The dollar index slipped 0.10 per cent, making bullion cheaper for overseas buyers and adding momentum to gold's rally. Investors are awaiting the Fed's September 17 policy decision, where a 25-basis-point rate cut is seen as the most likely outcome.

With US jobs data showing slower hiring and the unemployment rate rising to 4.3 per cent in August, markets are increasingly betting on monetary easing. Inflation, however, remains sticky at 2.9 per cent in August, above the Fed's 2 per cent target, limiting chances of a deeper 50-bps cut.

Manappuram, Muthoot, IIFL rally with gold surge

The surge in gold prices boosted shares of gold financing companies. IIFL Finance rose over 3.5 per cent to Rs 455.10, extending a 38 per cent gain in the past six months. Manappuram Finance advanced 2 per cent to ₹295.05, up 42 per cent in the past six months, while Muthoot Finance gained 1.5 per cent to Rs 2,980, rising 28 per cent over the same period. Higher gold prices increase the value of collateral against loans, reducing default risks and improving business prospects for these lenders.