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Markets now see a 25% probability of a July rate cut, with chances of two rate cuts this year rising to 70%. However, if the Fed hints at a slower pace of easing, the dollar may strengthen—putting pressure on bullion.
By Anshul June 2, 2025, 4:52:29 PM IST (Updated)
Gold prices rose on Monday (June 2) as traders built fresh positions. Benchmark rates from the India Bullion & Jewellers Association (IBJA) showed 24K gold trading at ₹96,192 per 10 grams. The 22K rate stood at ₹88,112 per 10 grams.
Strong spot demand supported the uptrend.
Analysts said speculators drove the rally.
“Fresh positions built up by participants led to a rise in gold prices,” they noted.
Global cues also remained firm. Gold futures in New York jumped $50.30 or 1.52% to $3,365.70 per ounce.
Ongoing conflicts in Ukraine and the Middle East, along with tariff uncertainty, pushed investors toward safe-haven assets.
Global trends and a cautious Fed
Gold held near the $3,300 per ounce through May, moving in a $150 per ounce band.
According to Augmont’s report, the metal failed to make a decisive move as markets reacted to mixed signals—US tariffs, economic data, and central bank commentary.
US President Trump’s decision to delay European tariffs until July 9 initially hurt gold sentiment.
Risk appetite returned, but the metal stayed resilient as US markets remained shut for Memorial Day.
Later in the week, the Fed’s May meeting minutes pointed to confusion. Officials expressed concerns about sticky inflation and weakening growth. This, combined with legal pushback on Trump's tariff powers, pushed gold to a one-week low of $3,250 before it bounced back.
What lies ahead?
Markets now see a 25% probability of a July rate cut, with chances of two rate cuts this year rising to 70%. However, if the Fed hints at a slower pace of easing, the dollar may strengthen—putting pressure on bullion.
The Fed enters its quiet period on June 7. Until then, traders will watch every policy remark closely. US manufacturing data and Fed Chair Jerome Powell’s speech later tonight are key triggers.
Short-term range
Gold is likely to trade between $3,220 per ounce (₹94,000 per 10 grams) and $3,375 per ounce (₹97,500 per 10 grams) in the near term. Augmont notes that a breakout on either side may lead to a 2–3% move.
The tone for gold in June may depend on how US policymakers shape expectations on rate cuts and trade policies. If uncertainty lingers, gold may remain in demand.
-With PTI inputs
First Published:
Jun 2, 2025 4:49 PM
IST
