Gold Prices Ease After Record Peak

Gold Prices Ease After Record Peak Ahead of Federal Reserve Rate Decision

Gold prices eased on Wednesday following record highs, as investors awaited the US Federal Reserve’s critical interest rate decision. The precious metal surged earlier on expectations of a 25 basis point cut, the first since December 2024. This is driven by concerns over a slowing U.S. labor market and ongoing inflation pressures influenced by tariffs and other economic factors.

Federal Reserve’s Influence on Gold

The Fed’s upcoming decision, expected on September 17, 2025, is closely watched by markets globally. Many anticipate a rate cut to support economic growth amid inflation risks. Fed Chair Jerome Powell’s remarks following the announcement are expected to offer insights into the future monetary policy direction. Political pressures, including those from President Donald Trump, add complexity to market expectations.

Understanding International and Indian Gold Prices and Global Price Discrepancy

Gold slipped on Wednesday after prices scaled beyond $3,700 mark in the previous session, down 0.4% at $3,676.29 per ounce as of 9:10 a.m. ET (1310 GMT), after hitting a record high of $3,702.95 on Tuesday which is around USD 118.15 per gram (1 Oz = 31.1035 gm used for precious metals pricing).

In India, on September 17, 2025, the price of 24 karat gold in India was approximately ₹11,171 per gram. However, when converting the international gold price of roughly USD 3,676 per ounce at the current exchange rate of about 88 INR per USD, this equates to approximately ₹10,388 per gram.

This difference arises due to several factors:

The international price reflects the pure market value of gold without local taxes.
Indian gold prices include import duties, Goods and Services Tax (GST), making charges, and other local costs.
Demand-supply dynamics and distribution costs in India also push prices higher.
Each state in India may add variable VAT or additional charges impacting final consumer prices.

The internationally accepted measurement for gold is 1 troy ounce = 31.1035 grams, which is used for global pricing.

Market Outlook

Despite easing, gold remains a safe haven amid inflation and geopolitical risks. The Fed’s challenge is to balance inflation control with support for employment growth. Market participants will closely monitor Fed announcements for cues on monetary policy and the impact on gold prices globally and domestically.

Conclusion

Gold prices pulled back slightly from record levels as investors anticipate the Federal Reserve’s rate cut decision. The difference between global and Indian gold prices is primarily due to taxes and local market factors in India. This dynamic affects the buying power and sentiment among Indian investors and consumers.

Investors worldwide remain vigilant as the Fed’s policy will heavily influence precious metals and currency markets for the rest of 2025.