Gold price at fresh record high, almost hits Rs 1,21,000 mark; more upside ahead?

Gold price on Tuesday hit a record high as the US government services shutdown continued for sixth day amid weakness in the US dollar. Expectations of interest rate cuts in Federal Reserve's October meeting this year also added shine to the yellow metal. 

The US dollar index is down 9.51% this year, sharpest decline the currency has seen since 2017. The index, which touched a three-year high of 110.18 this year, was trading at 98.20 today. On the other hand, gold price on MCX has risen over 50% this year. Gold price hit a peak of Rs 1,20,900 per 10 gm on MCX today. The yellow metal gained Rs 651 from the previous close of Rs 120249.  

The rising gold demand can also be attributed to festive season buying, which boosted sentiment around the yellow metal. 

In the global market, gold price hit a record of $4,000 an ounce amid a political crisis in France.  

French Prime Minister Sebastien Lecornu resigned on Monday, just hours after appointing his new Cabinet, plunging France straight back into a political crisis it has been stuck in since 2022.

Darshan Desai, CEO - Aspect Bullion & Refinery said, "Gold prices have hit new record highs, with futures reaching $4,000 an ounce on the Comex. This surge comes as the US government shutdown stretches into its sixth day, and political turmoil in France adds to global uncertainty. A combination of retail and institutional buying, along with ongoing hopes for a Federal Reserve rate cut, despite the lack of key economic data, is keeping upward pressure on prices. If gold does pull back from these highs, it could present a buying opportunity for investors looking to enter the market."

Rahul Kalantri, VP Commodities, Mehta Equities said, "Gold has support at $3920-3880 while resistance at $3990-4025. In INR, gold has support at Rs 1,19,600-1,19,280 while resistance lies at Rs 1,20,850-1,21,400."