Gold prices rocket to a new high after US Fed rate decision: Is it a good time to buy?

Gold prices on March 21: Following US Federal Reserve meeting which voted to keep interest rates at a 23-year high for a fifth consecutive meeting and signaled that it still expects to make three cuts this year, gold price extended its rally. Gold futures contract on the Multi Commodity Exchange (MCX) for the April 2024 expiry opened higher at ₹66,100 per 10 gm. It went on touch an intraday high of ₹66,778 per 10 gm within minutes of the commodity market's opening.

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US Fed Chair Jerome Powell highlighted that officials would like to see more evidence that prices are coming down but “it’s still likely in most people’s view that we will achieve that confidence and there will be rate cuts."

What experts said on gold price rise?

Chris Weston, head of research for Pepperstone Group Ltd said as per Bloomberg, "What we saw last night was the green light really for gold traders to come back in. The Fed have said that right now they’re tolerant of the inflation that we’ve seen, they’re tolerant that the labor market strength is not going to be the impediment.”

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What about spot gold prices on March 21?

Spot gold rose 0.7% to $2,201.94 an ounce as of 9:40 a.m. in Singapore. The Bloomberg Dollar Spot Index declined 0.2% while silver, platinum and palladium were all higher.

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Why have gold prices been rising?

Gold prices have surged since mid-February owing to long-standing supports including heightened geopolitical risks and buying by central banks which are led by China. The rally has been partially driven by expectations for looser monetary policy in the US, experts believe.