Gold prices reached a historic peak of Rs 1,12,750 per 10 grams on Tuesday in India, driven by strong global trends. This surge, amounting to Rs 520 per 10 grams, reflects growing expectations of further monetary easing by the US Federal Reserve amidst geopolitical tensions.
On the Multi Commodity Exchange (MCX), gold futures for October delivery climbed 0.46 percent to achieve this all-time high, while the December contract also marked a record, increasing by Rs 530 to Rs 1,13,750 per 10 grams.
Silver also performed robustly, with December futures rising 0.34 percent to Rs 1,34,016 per kilogram. The March delivery contract spiked 0.37 percent, reaching Rs 1,35,397 per kg. This showcases the unwavering demand for precious metals in the current market climate.
Experts attribute the astonishing gold rally to multiple factors, including the recent cut in interest rates by the Federal Reserve and expectations for further easing in response to economic conditions. Safe-haven buying amidst geopolitical uncertainties has added fuel to the fire, alongside continuous central bank purchases.
“The growth in gold and silver prices shows no indication of faltering,” stated Rahul Kalantri, Vice-President of Commodities at Mehta Equities Ltd. “With gold soaring to unprecedented levels and silver reflecting its strongest pricing in nearly 15 years, the market is enthusiastic.”
Kalantri pointed out that the Fed’s recent decision to cut interest rates by 25 basis points has positively impacted market sentiment. He noted that a softer dollar index and a weakened rupee have further motivated domestic bullion prices.
“Continuous purchases by central banks, alongside strong inflows into ETFs and safe-haven buying, have significantly bolstered the strength of these precious metals,” Kalantri added.
In the international arena, gold futures for December delivery hit USD 3,794.82 per ounce. This price increase indicates a strong global correlation, as market dynamics extend beyond Indian borders.
Jigar Trivedi, Senior Research Analyst at Reliance Securities, expressed optimism regarding future price trends. “Gold’s latest highs are largely supported by expectations of further interest rate cuts from the Federal Reserve,” he stated. “The Fed recently executed its first cut of the year, leading to speculation of more reductions as the economic outlook changes.”
Trivedi added that traders are keenly awaiting remarks from Fed Chair Jerome Powell concerning the economic outlook, coming after Friday’s release of the Personal Consumption Expenditures price index, the Fed’s preferred inflation metric, which can influence future monetary policy decisions.
Investors remain cautious as ongoing geopolitical tensions, chiefly the Russia-Ukraine conflict and turmoil in the Middle East, contribute to the safe-haven flows in the bullion market. Despite elevated price levels, these risks have prevented major corrections.
As gold continues to shine bright, its attraction as a safe investment during uncertain times amplifies its relevance in global financial markets. Traders and investors alike will keep a close watch on economic indicators in the coming days.
