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The city of Hyderabad is experiencing a surge in gold prices, pushing them to near record highs. This upward trend is attributed to a growing optimism among investors that the US Federal Reserve will soon lower interest rates. The price of 10 grams of 24-carat gold has climbed over one percent since September 12th, reaching Rs 74,450. This marks a significant increase from the previous day's price of Rs 73,150.
The recent surge in gold prices is directly linked to the anticipated decrease in US interest rates. A reduction in rates would likely lead to a decline in the value of the US dollar and US Treasury yields, making gold a more attractive investment option. The anticipation of this rate cut, particularly expected to take place this month, has fueled the current rise in gold prices.
While gold prices have soared in Hyderabad, reaching three-month highs in India, this surge could potentially dampen domestic demand. The increased cost of gold may discourage some buyers from purchasing, potentially leading to a decline in demand. The future trend of gold prices remains uncertain, contingent on factors such as the Federal Reserve's decision on interest rates and the ongoing geopolitical situation in the Middle East.
Source: Gold rates in Hyderabad near all-time highs after spike