Gold prices reached a new all-time high of Rs 78,900 per 10 grams in the national capital on Wednesday, reflecting a gain of Rs 250 due to consistent purchasing by jewellers, as reported by the All India Sarafa Association. In the previous session on Tuesday, the precious metal closed at Rs 78,650 per 10 grams.
Silver also experienced an uptick, rising by Rs 1,000 to Rs 93,500 per kg, driven by fresh buying from industrial units and coin makers. On Tuesday, silver had finished at ₹92,500 per kg.
Additionally, gold of 99.5 per cent purity increased by Rs 250, setting a new record high of Rs 78,500 per 10 grams compared to the previous close of ₹78,250 per 10 grams.
Traders attributed the surge in gold prices to robust demand from local jewellers. Furthermore, the decline in equity markets contributed to the rally in gold, as investors sought safe-haven assets.
In futures trading on the Multi Commodity Exchange (MCX), gold contracts for December delivery rose by Rs 268, or 0.35 per cent, to Rs 76,628 per 10 grams. Silver contracts for December delivery also climbed by Rs 580, or 0.63 per cent, reaching Rs 92,203 per kg on the exchange.
“Gold prices remained elevated with gains in the MCX, while Comex gold traded above USD 2,675. Traders continue to position themselves based on expectations that the Federal Reserve will maintain its path of interest rate cuts,” stated Jateen Trivedi, VP Research Analyst – Commodity and Currency at LKP Securities.
This has helped maintain bullish sentiment around gold, which achieved record highs in September. Since then, gold has been consolidating in the low-to-mid USD 2,600 per ounce range, as traders foresee a slower pace of interest rate cuts from the Fed, Trivedi added.
In international markets, Comex gold futures increased by 0.51 percent to USD 2,692.50 per ounce.
“Mixed comments from a range of US Federal Reserve officials are keeping market participants anxious. Governor Christopher Waller expressed support for a cautious approach to further rate reductions in the coming months, citing recent indications of resilience in the US economy and persistent inflation,” said Manav Modi, Senior Analyst, Commodity Research at Motilal Oswal Financial Services Ltd.
Commodity experts note that lower expected interest rates are bullish for gold prices, as they decrease the opportunity cost of holding a non-interest-paying asset. The yellow metal continues to be strongly supported by heightened geopolitical tensions and uncertainty surrounding the upcoming US Presidential elections.
While Fed officials are divided on the number of rate cuts for the rest of the year, the US Fed remains on course for additional policy easing, with markets eagerly awaiting forthcoming economic data from the central bank for clarity on its rate cut trajectory, they added.
Silver was quoted at 0.91 percent higher at USD 32.05 per ounce during Asian market hours. This week, attention will focus on US Retail Sales, Industrial Production (IIP), and China GDP data, which will provide insights into the future trajectory of bullion prices, Modi concluded.
(With inputs from PTI)
