Home Business News Fed rate cut outlook boosts gold, Indian demand slows

Fed rate cut outlook boosts gold, Indian demand slows

by Thea Coates Finance Reporter
21st Mar 24 1:04 pm

Gold prices surged to their highest levels, extending gains from the previous day, following remarks from the Federal Reserve indicating its commitment to maintaining its outlook for three interest rate cuts in 2024, despite leaving rates unchanged in March as anticipated.

However, it revised its projection for 2025 to include one less cut. This maintained a positive outlook for gold, buoyed by expectations of interest rate cuts this year.

At the same time, central bank demand for the asset could continue to support its performance. Central banks have sustained successive months of net purchases and could continue to drive demand for gold over the medium term ahead of the interest rate cut cycle.

However, in India, one of the world’s major consumers of gold for jewelry, the current rally in gold prices may face near-term resistance as demand slows.

Record high prices have limited demand for gold jewelry, with reports indicating a widespread decrease in rural and urban centers despite the ongoing wedding season. Consumers and jewelers are holding off purchases, awaiting a potential price correction.

Leave a Comment

You may also like


Sign up to our daily news alerts

[ms-form id=1]