Gold prices hit two-week high, what's driving the yellow metal

Gold prices advanced on Tuesday, reaching their highest level in two weeks due to a weakening dollar and concerns over the Federal Reserve's policy direction. Spot gold increased by 0.2% to $3,371.28 per ounce, marking its peak since August 11, while US gold futures for December delivery held steady at $3,418.90 an ounce.

In India, gold prices stood at ₹1.01 lakh per 10 grams for 24 karat and ₹93,040 per 10 grams for 22 karat. This rally followed the dismissal of Federal Reserve Governor Lisa Cook by US President Donald Trump, a move that unsettled markets and raised questions about the central bank’s independence, causing the US dollar index to slip by 0.2%.

Industry analysts underline the volatility expected in gold prices until new inflation data is released.

Rahul Kalantri, VP Commodities at Mehta Equities, highlighted, "Gold has support at $3,352–3,335 an ounce while resistance is seen at $3,395–3,410 an ounce. In Indian markets, support is placed at ₹1,00,240–99,850 per 10 grams while resistance stands at ₹1,00,950–1,01,150 per 10 grams." The market’s attention is also on the upcoming release of the Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred inflation measure, for further clarity on monetary policy."

Darshan Desai, CEO of Aspect Bullion and Refinery, remarked, "Gold prices climbed following US President Donald Trump's sudden dismissal of Federal Reserve Governor Lisa Cook, prompting a sharp reaction in equity markets and driving investors toward safe-haven assets. The yellow metal is expected to remain supported by growing expectations of a potential Fed rate cut next month, especially if concerns over the central bank’s independence persist and its impact on the US Dollar." Desai’s observations reflect broader market speculations about potential Fed interest rate cuts, which generally make gold—an asset that does not yield interest—more attractive to investors.

Riya Singh – Research Analyst, Commodities and Currency , Emkay Global Financial Services said, "Gold held steady near $3,367 per ounce as markets weighed the outlook for US interest rates following Federal Reserve Chair Jerome Powell’s cautious comments at the Jackson Hole symposium. Powell highlighted rising risks in the labour market, opening the door to a potential rate cut in September, though inflation concerns remain. For gold, $3,284 remains a strong support with resistance at $3450. Momentum to be contained within this range. Silver is trading in an ascending triangle pattern with bullish bias. Support is at $ 38.30 with resistance at $39.10."