The uptrend was driven by fresh buying and firm spot demand.
Globally, gold futures rose 0.80% to $3,229.30 per ounce on COMEX, extending a recovery that began late last week.
What’s driving gold prices?
Analysts said the price rise was triggered by renewed safe-haven interest after a major shift in the US credit rating. Moody’s downgraded the US sovereign rating from Aaa to Aa1, citing high fiscal deficits and national debt, which has now hit $36 trillion.
This reignited concerns about the US economic outlook and lifted demand for gold.
Rahul Kalantri, VP Commodities at Mehta Equities, said that weak US economic data and expectations of more interest rate cuts by the Federal Reserve are lending further support.
Kaynat Chainwala, AVP-Commodity Research at Kotak Securities, noted that COMEX gold had hit a one-month low of $3,123 last week, its worst performance this year. The drop was attributed to easing geopolitical tensions and optimism in global trade talks. However, the downgrade of the US rating reversed the sentiment and pushed prices higher.
Key support and resistance levels
In rupee terms, gold has support at ₹91,850–91,480 per 10 grams and resistance at ₹92,850–93,490 per 10 grams, according to Mehta Equities. For COMEX gold, support lies at $3,195–3,175 per ounce, while resistance is seen at $3,245–3,260 per ounce.
Investment outlook
Gold remains a preferred hedge in times of economic uncertainty. The rebound signals investor confidence in bullion’s long-term value amid mounting fiscal concerns in the US and expectations of easier monetary policy.
With the Federal Reserve likely to cut rates further and global risks still looming, gold could retain its shine as a safe-haven asset in the near term.
–With Reuters inputs
First Published: May 19, 2025 1:21 PM IST
