Gold buyers in India may get some relief ahead of Diwali as the US Federal Reserve has kept interest rates unchanged. The decision could help reduce sharp price fluctuations in the coming weeks, offering buyers a more stable market. However, a sustained recovery in gold prices will depend on how expectations around the Fed’s December policy decision change. Rising festive demand in India and continuing global tensions are also influencing the market.
Gold Prices Remain Under Pressure
Commodity expert Anuj Gupta says the decision to keep interest rates unchanged could bring some stability to gold prices. However, stable prices do not necessarily mean that a fresh rally is about to begin. According to the report, international gold prices were around $4,120 per ounce, while gold on the Multi Commodity Exchange (MCX) was facing pressure below ₹1.46 lakh per 10 grams. Buyers are watching these levels closely as they plan their festive purchases.
₹1.40 Lakh Level Could Attract Buyers
If domestic gold prices move towards ₹1.40 lakh per 10 grams, it could create a buying opportunity for consumers, according to the market outlook cited in the report. However, prices in India depend on several factors, including international gold rates and the rupee’s exchange rate against the US dollar. A weaker rupee can make imported gold more expensive, even when international prices remain relatively stable. Buyers should therefore watch domestic prices rather than relying only on global market movements.
December Fed Decision in Focus
The next major factor for gold prices will be the US Federal Reserve’s December policy decision. Market expectations about a possible rate hike are already influencing investor sentiment. The report puts the probability of a December rate increase at 78%. If interest rates rise, investments that offer interest returns may become more attractive compared with gold, which does not provide regular interest income. This could put pressure on gold demand and prices.
Festive Demand Supports the Indian Market
Despite uncertainty in international markets, gold buying has increased in India during the festive season. The India Bullion and Jewellers Association (IBJA) has reported healthy buying activity across the country over the past five days. Higher seasonal demand is providing support to the domestic market. The report also notes that discounts on gold in the Indian market have narrowed as demand has improved, suggesting that festive purchases are helping the market absorb some of the international pressure.
What Gold Buyers Should Watch Next
The outlook for gold ahead of Diwali remains dependent on several factors. The Fed’s future decisions, global tensions, currency movements and domestic festive demand will all influence prices. A move towards ₹1.40 lakh per 10 grams could interest buyers, but it is not a guaranteed price level. Consumers planning to purchase gold should check the latest local rates, making charges and taxes before buying, as the final jewellery bill may differ from the quoted market price.
