Gold Rally Extends to Fifth Week on Dollar Decline and Fed Expectations

MCX gold prices in India have extended their rally for a fifth consecutive week, pushing August gains into double digits. The U.S. dollar's persistent decline has made bullion cheaper for holders of other currencies, supporting demand for the metal.

The reduced expectations of a US Federal Reserve rate hike in its upcoming meeting have further aided the sentiment, even as crude oil prices climbed to a one-month high earlier this week.

MCX gold wrapped up the week with gains of nearly ₹8,000 per 10 grams, settling at ₹1,62,438 and marking its highest level in more than three months. The latest rally pushed its August gains to 13.3% or ₹19,000, while its year-to-date return rose to 20%.

Renewed demand has also helped the yellow metal recover much of its earlier losses, narrowing the gap from its record high of ₹1,80,779 touched in January. At current levels, gold is trading about 10% below its peak, compared with a gap of around 21% at the start of the month.