CHENNAI: Gold prices continued their upward trend on Friday, August 23, supported by growing expectations of a US Federal Reserve rate cut after Jerome Powell’s dovish comments at the Jackson Hole symposium. His signal that the Fed may ease policy soon to counter slowing growth and tariff-related inflation risks pushed US bond yields lower and weakened the dollar, which in turn boosted demand for gold.
Safe-haven buying also added momentum as investors remained cautious about global trade frictions and currency volatility. Technically, gold held firmly above short-term support levels and moved closer to its recent highs, indicating strong buying interest in the market.
The current rally has raised the question of whether this is the right time to buy gold. In the positive case, if the Fed begins cutting rates, real yields are likely to fall further, which has historically supported gold prices. A weaker dollar would also enhance gold’s appeal for global investors. On the other hand, there are risks in the short term. Any profit-taking after the recent rally or a sudden shift in Fed communication could lead to volatility. Stronger-than-expected US economic data could also reduce the chances of aggressive rate cuts, which may cause a temporary pullback in gold.
For long-term investors, the macroeconomic backdrop remains supportive, and gold can be accumulated gradually, particularly on price dips. For short-term traders, it may be prudent to watch resistance levels closely and manage risk carefully.
Overall, the uptrend in gold appears intact and expectations of Fed rate cuts strengthen the outlook for further gains. While chasing the rally may carry near-term risks, buying on declines could be a more balanced strategy.