Gold prices edge higher: Global factors supporting the rally

Gold prices edged higher on Thursday, June 26, amid a weaker US dollar and political uncertainty around the leadership of the Federal Reserve.

Spot gold rose 0.2% to $3,339.20 per ounce, while US futures gained 0.3% to $3,353.10 an ounce. A drop in the dollar to its lowest since March 2022 made gold more attractive for global buyers.

In India, 24 karat gold was priced at ₹98,950 per 10 grams.

Prices for 22 karat and 18 karat stood at ₹90,700 and ₹74,210 per 10 grams respectively, as per Good Returns.

What’s driving gold prices

Fed chair concerns: Reports suggesting that former US President Donald Trump had considered replacing Jerome Powell by September or October have stirred fears over the Fed’s future independence.

This has increased demand for safe-haven assets like gold.

Dovish rate expectations:

Powell’s recent Senate testimony reflected caution on aggressive rate cuts due to lingering inflation risks. Analysts say the political pressure for a more dovish Fed is growing, which is weighing on the dollar and supporting bullion.

Profit booking and technical range: After recent highs, gold is now consolidating.

Jateen Trivedi of LKP Securities expects short-term volatility with gold likely trading between ₹96,000 and ₹98,500 per 10 grams until fresh US macro data is out.

Global uncertainty: Geopolitical risks remain, even as a ceasefire between Israel and Iran holds.

According to Trivesh D of Tradejini, the earlier rally in gold from ₹79,900 to over ₹1,01,000 per 10 grams is now pausing, but underlying support remains from central bank buying and global tensions.

Outlook

Gold may stay range-bound in the short term, with market direction hinging on upcoming US GDP data later today and the core Personal Consumption Expenditures (PCE) price index due Friday (June 27).

Both are key inputs for shaping the Fed’s next policy moves. Until then, analysts expect choppy but supported trade in gold.

-With Reuters inputs