Gold Prices Soar 2.21% on Dovish Fed Comments

Gold prices surged by 2.21% to settle at ₹155,775 on Tuesday, as dovish comments from Federal Reserve officials reduced expectations of an immediate rate hike. Fed Governor Christopher Waller indicated that he could support keeping rates unchanged at the September meeting if August inflation data confirms continued improvement.

The US dollar and Treasury yields retreated from recent highs following Waller's comments, which also led to a decrease in the probability of a near-term rate hike to around 50% from nearly 62%. The ADP employment report showed weaker-than-expected numbers, highlighting softness in the US labor market.

Meanwhile, Indian gold discounts widened sharply to as much as ₹135 per ounce, while Chinese bullion traded at discounts of $2-$5. London vault holdings stood at 9,534 tonnes at end-July, valued at approximately ₹1.2 trillion and equivalent to around 762,723 gold bars.