Gold holds near ₹1 lakh as weak U.S. inflation data fuels rate cut hopes; China trade truce caps gains

The gold price is hovering around ₹1 lakh on the domestic front, supported by a weaker dollar after the U.S. inflation data, which has increased bets for an interest rate cut in September 2025; however, a trade truce between the U.S. and China has kept gains in check. 

The prices slipped by nearly 2% from an all-time high of ₹1,04,350 recorded last week in Ahmedabad after U.S. President Donald Trump ruled out tariffs on imported bars of the yellow metal. On the Multi Commodity Exchange (MCX), gold futures settled at ₹1,00,157 per 10 grams. "As investors considered the U.S. Federal Reserve's rate forecast in light of the most recent CPI data, gold prices were circling at $3,400. Core inflation increased from 2.9% to 3.1% in July, while headline inflation was 2.7%, below the 2.8% prediction. Gold's attractiveness increased as the data allayed worries about tariff-driven inflation and supported anticipations of a 25-basis-point Fed rate cut in September," said Renisha Chainani, head of research, Augmont.

Furthermore, despite Trump's declaration that there would be no tax, the Customs and Border Protection shocked markets last week by placing 100-ounce and 1-kg gold bars under a customs code that imposes duties.

"Meanwhile, Kansas City Fed President Schmid said the U.S. central bank should not take the tariffs' muted effect on inflation so far as an opportunity to cut interest rates, but rather as a sign that monetary policy is 'appropriately calibrated.' The U.S. and China agreed to extend the trade truce for another 90 days. President Trump also opened the doors of Nvidia to China, imposing a 15% fee on sales to the country. However, China has asked its companies not to use Nvidia's chips. Focus now shifts to US PPI, retail sales, and IIP data," said Manav Modi, analyst–precious metal research, Motilal Oswal Financial Services Ltd.

In India, consumer demand for jewellery is down significantly in 2025, albeit some amount of investment demand has offset this, said Aksha Kamboj, VP, India Bullion & Jewellers Association (IBJA) and Executive Chairperson, Aspect Global Ventures. "Analysts believe that gold will trade within a range in the near term, with upside potential only if central banks continue to buy and risks persist globally. Investors should keep this advice in mind: treat gold as a strategic asset over the longer term, and "buy on dips," rather than chase prices in higher multiples."