MCX Gold Surges to Three-Month High as Dollar Weakness and Oil Prices Boost Bullion
The Multi Commodity Exchange (MCX) Gold price hit a three-month high of Rs 1,63,200 per 10 grams on Wednesday, driven by dollar weakness and oil prices. This comes after the framework of a Hormuz corridor agreement was confirmed between Washington and Muscat, which removed a disruption premium that had kept crude above $73 for most of the month.
The Federal Reserve's Jackson Hole speech is less than 48 hours away, and markets are pricing in two more rate cuts before the end of 2026. If Fed Chair Jerome Powell reaffirms this trajectory, it could keep the dollar index under pressure and support gold's current range.
The rupee's concurrent move to 95.40 against the dollar added a layer of complexity to the bullion math, but the rupee and MCX Gold rose simultaneously due to international gold's own dollar-term gains. The SPDR Gold Shares ETF has also seen significant inflows, with approximately 8 tonnes added in August, making it the fourth consecutive week of inflows.
This divergence between gold and base metals suggests a monetary and safe-haven story rather than an inflation story. Indian jewellers typically hedge forward when spot breaks resistance levels, which can cap near-term upside as that hedging pressure hits the market.