After scaling fresh lifetime peaks last week, gold prices eased slightly on Monday morning as traders booked profits at higher levels and the US dollar regained some strength.
On the Multi Commodity Exchange (MCX), October gold futures slipped 0.47% to Rs 1,07,219 per 10 grams as of 9:00 am.
Dollar Gains Trim Momentum
The US dollar index rose about 0.20%, making gold more expensive for overseas buyers and dampening demand. This slight uptick in the dollar came after a strong rally in bullion, which saw domestic prices peak at Rs 1,07,807 per 10 grams and international prices peak at $3,653.30 per troy ounce.
Gold Price today remains steady in domestic markets as investors await fresh economic cues. Despite the pullback, has achieved an impressive 35% year-to-date return, primarily driven by safe-haven flows, central bank accumulation, and anticipation of looser US monetary policy.
Weak Labor Data Fuels Fed Rate Cut Buzz
The primary catalyst for the spike has been weakening signals from the US labour markets, with August non-farm payrolls adding just 22,000 jobs, much lower than the 75,000 expected, and unemployment increasing to 4.3%, the highest in almost four years. Revisions also showed weaker job creation in June and July than previously reported.
Jeffrey Roach, Chief Economist at LPL Financial, noted that the labor market is “coming to a standstill” as businesses delay hiring amid uncertainty over tariffs and economic policy.
On the MCX Gold futures, prices showed mild gains in early trade amid weak global sentiment. This slowdown has heightened expectations that the will deliver a 25-basis-point rate cut at its September meeting.
A stronger US Dollar has capped gold’s upside, making the metal more expensive for overseas buyers. While some investors had speculated about a deeper cut, persistent inflation pressures make a larger move less likely.
Technical Outlook for Gold
Analysts expect volatility to persist in the near term, with markets closely tracking currency movements, US inflation data, and the Fed’s policy stance.
On the international market, support is expected at $3,600-$3,620 per ounce, while resistance is seen at $3,674-$3,700.
The release of crucial US Job Data later this week is expected to influence market direction significantly. On MCX futures, key support lies at Rs 1,07,000-Rs 1,06,350 per 10 grams, while resistance is projected at Rs 1,08,200-Rs 1,09,000.
Manoj Kumar Jain of Prithvifinmart Commodity Research believes gold is likely to remain in a broad upward trend, though profit-booking phases may create short-term pullbacks. Hopes of a potential Fed Rate Cut are keeping traders bullish on gold in the medium term.
Outlook: Still Favorable
While gold has seen a minor correction at the start of the week, the overall backdrop is favorable. Softer US economic data, dovish comments by the Fed, geopolitical uncertainty, and the Indication that central banks are still buying, provide a firm base for prices.
The US CPI inflation report is a major event scheduled for Thursday. A softer CPI report could solidify market pricing for Fed rate cuts, and push gold upwards at Rs 1,10,000.