Gold prices are holding steady today, June 6, 2025, as investors await the outcome of the Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) meeting. The market is anticipating potential policy rate adjustments and their impact on the precious metal.
RBI MPC Meeting in Focus
The RBI's MPC, led by Governor Sanjay Malhotra, is expected to announce its decision on key interest rates today. A widely anticipated move is a 25 basis points (bps) cut to the repo rate, bringing it down to 5.75% from the current 6.00%. This would mark the third consecutive repo rate cut, following similar reductions in February and April. Some experts even suggest the possibility of a bolder 50 bps cut.
The backdrop to this meeting includes cooling inflation, which moderated to 3.16% in April – the lowest since July 2019 and within the RBI's 2-4% target band – and resilient GDP growth. India's Q4FY25 GDP growth surged to 7.4%, with full-year growth at 6.5%, aligning with estimates.
Potential Impact of Rate Cut
While a rate cut is largely factored into market expectations, its actual impact on gold prices remains to be seen. Some analysts believe that a 25 bps cut may already be priced in and might not provide a significant boost to investor sentiment. However, a favorable projection of inflation and growth from the RBI could weigh on gold prices.
Lower interest rates generally devalue currencies and can drive up gold prices, as seen in late 2024. The expectation is that a weaker dollar makes gold more attractive.
Global Factors Influencing Gold Prices
Besides the RBI's policy decision, several global factors are also influencing gold prices:
Expert Opinions and Forecasts
Experts suggest that caution continues to dominate the bullion market, with multiple factors capable of influencing price movements in either direction. Some analysts predict that gold prices will rise to $3,560.59–$3,925.39 by the end of 2025, while the most bullish forecasts suggest a surge to $3,956.22. More conservative forecasts estimate prices could reach $3,315.00 by year-end.
Gold as a Safe Haven
Nervous investors have been flocking to gold as a safe haven against inflation, geopolitics, and tariff turmoil. Gold has shown strong performance, with an almost 30% increase this year, following a gain of over 25% in 2024.
City-Wise Gold Rates
While specific city-wise gold rates are not available in the provided context, it's important to note that gold prices typically vary slightly across different cities due to factors such as local taxes, transportation costs, and demand. It is advisable to check with local jewelers and financial sources for the most up-to-date rates in specific cities.
