US interest rates unchanged, held at 3.75%-4%:Gold could reach ₹1.78 lakh/10 gm by year-end, said expert

The US central bank, the Federal Reserve, has left its interest rates unchanged, maintaining them at 3.75% to 4%. Interest rates were raised by 0.25% in September. The decision will directly affect markets around the world as well as gold prices in India. Gold is currently trading in India at ₹1,43,360 per 10 grams. Experts say that gold prices may see some sluggishness in the coming months because of inflation in the US, but they will rise in the long term, and gold could reach ₹1.78 lakh per 10 grams by the end of 2027. Global economic developments are set to directly influence gold prices worldwide, including in India. Currently, gold is trading at around ₹1.43 lakh per 10 grams on the Multi Commodity Exchange (MCX). According to market experts, while sticky US inflation could keep gold prices subdued in the near term, the precious metal remains on a strong long-term upward trajectory. Analysts project domestic gold prices could reach ₹1.78 lakh per 10 grams by the end of 2027. Q1: How will this impact gold prices in India? Gold is a non-yielding asset—it does not pay interest like a bank fixed deposit. Consequently, whenever US interest rates, the US Dollar Index, or bond yields rise, international gold prices face downward pressure. However, domestic factors will help cushion Indian prices: Weak Indian Rupee: According to Souvik Biswas, Research Head at Bajaj Capital, even if global gold prices remain soft, a weaker Indian Rupee against the US Dollar will prevent any sharp drop in domestic prices. Festive and Wedding Demand: Dr. Vikas Gupta, CEO of Omniscience Capital, points out that strong domestic demand during the upcoming festive and wedding seasons will provide steady underlying support to local rates. Q2: What is the price forecast for gold on MCX? Vedika Narwekar, Research Analyst at Anand Rathi Shares, shares her outlook for gold on the MCX (currently trading around ₹1,43,360 per 10 grams): November 2026: Prices are expected to range between ₹1.34 lakh and ₹1.48 lakh per 10 grams. December 2026: Prices could recover slightly to trade between ₹1.40 lakh and ₹1.53 lakh per 10 grams by the end of the year. By End of 2027: Over a longer horizon, gold could rally to ₹1.75 lakh – ₹1.78 lakh per 10 grams. Q3: Why will gold prices hold firm despite US Fed tightening? The US Federal Reserve may raise interest rates once again in December to control inflation. Despite potential monetary tightening, several global headwinds will keep gold prices elevated: Geopolitical Tensions Crude Volatility: Ongoing global conflicts and fluctuating crude oil prices will continue to boost gold’s safe-haven appeal. Central Bank Buying US Debt: Central banks across the globe continue to buy gold aggressively to diversify reserves. Additionally, surging US national debt is providing a strong floor to prices. Expected Returns: Analysts believe gold may stay range-bound until the US elections in November, but it could deliver 10% to 12% returns in 2027. Investment Strategy: Expert Advice for Buyers and Investors Sanjiv Bajaj, Joint Chairman and MD at Bajaj Capital, offers the following guidelines for prospective gold buyers: Limit Exposure to 5–10%: Limit gold allocation (whether in physical jewelry, coins, or Gold ETFs) to 5% to 10% of your total investment portfolio. Stagger Your Purchases: Avoid making large lump-sum investments. If you already hold sufficient gold, wait before buying more. New buyers should accumulate gold incrementally through a systematic, SIP-like approach. Don’t Try to Time the Market: If you are buying gold for an upcoming wedding or event and have the budget ready, do not wait for deeper price corrections. Timing the commodity market precisely is nearly impossible. Increase Allocation Only If Inflation Surges: Vikas Gupta of Omniscience Capital advises increasing gold exposure beyond standard limits only if inflation accelerates sharply in the future.