On Tuesday, gold reached an all-time high of Rs 1,12,750 per 10 grams in the domestic futures market. The rise followed a significant global trend fueled by expectations of further interest rate cuts from the US Federal Reserve, along with increased safe-haven buying. The surge comes ahead of critical remarks from Fed Chair Jerome Powell.
Traders on the Multi Commodity Exchange (MCX) witnessed gold futures for October delivery increase by Rs 520, marking a 0.46 percent gain. Similarly, December futures advanced by Rs 530 per 10 grams, also achieving record levels at Rs 1,13,750.
Silver prices mirrored this upward trend, with December delivery silver futures gaining Rs 461, hitting Rs 1,34,016 per kilogram. March delivery for silver also rose by Rs 508, reaching a high of Rs 1,35,397 per kg.
Experts point out that the ongoing rally in bullion prices stems from multiple factors. The recent 25 basis point interest rate cut by the Federal Reserve and prospects for more easing have amplified market sentiment. Sustained demand for safe-haven assets amid geopolitical tensions and persistent central bank purchases further bolstered prices.
“Gold and silver continue to reach new heights, driven by a combination of global economic uncertainty and strong local demand,” said Rahul Kalantri, Vice-President of Commodities at Mehta Equities Ltd.
Kalantri highlighted that the lower dollar index and a weaker rupee contributed to boosting domestic gold prices. He noted, “Strong inflows into exchange-traded funds (ETFs) and persistent central bank purchases create ongoing support for precious metals.”
In international markets, gold futures for December hit a record peak of USD 3,794.82 per ounce. Analysts believe that continued cuts by the Federal Reserve will sustain this bullish environment.
Jigar Trivedi, Senior Research Analyst at Reliance Securities, commented, “Gold’s latest record reflects heightened expectations of additional interest rate reductions by the Fed, especially after the recent labour market weaknesses.” Market participants anticipate two additional 25 basis point cuts before the year concludes.
As investors await Fed Chair Jerome Powell’s remarks regarding the economic outlook, forthcoming data such as the Personal Consumption Expenditures price index will also provide insights into future monetary policy.
Geopolitical risks are another crucial factor. The prolonged Russia-Ukraine conflict and ongoing turmoil in the Middle East have increased the desirability of bullion as a safe haven. Consequently, these risks continue to support gold and silver prices at elevated levels despite their record highs.
In summary, the surge in gold and silver prices reflects a unique confluence of global economic conditions and local market dynamics. As gold trades at its highest price ever, investors keen on precious metals should stay vigilant for further developments from the Federal Reserve and international geopolitical events.
