Gold Prices Soar to Record Highs Amid Global Uncertainty
Gold prices surged by Rs 500 on Tuesday, reaching an unprecedented Rs 91,250 per 10 grams in the national capital. This remarkable increase is attributed to sustained demand from stockists and retailers, alongside favorable trends in international markets, as reported by the All India Sarafa Association. Just a day prior, gold with 99.9% purity had already climbed by Rs 1,300, marking a new peak of Rs 90,750 per 10 grams.
Factors Driving the Surge
The recent rally in gold prices is largely driven by ongoing uncertainties surrounding U.S. economic policies and geopolitical tensions. Saumil Gandhi, Senior Analyst of Commodities at HDFC Securities, noted that gold continues to be viewed as a safe-haven asset amid fears of a potential U.S. recession and the implications of U.S. President Donald Trump’s policies. The recent weak economic data from the U.S. has further fueled expectations of multiple interest rate cuts by the U.S. Federal Reserve this year, enhancing gold’s appeal as a non-yielding asset.
In addition to domestic factors, global market trends are also influencing gold prices. Spot gold reached a new record of USD 3,028.49 per ounce, while Comex gold futures rose to USD 3,037.26 per ounce. Analysts suggest that the combination of economic instability and geopolitical tensions, particularly U.S. military actions in the Middle East, has intensified demand for gold.
Silver Prices Remain Steady
While gold prices have seen significant increases, silver prices have remained stable at Rs 1,02,500 per kg, also reaching historic highs. This stability in silver prices contrasts with the volatility observed in gold markets. The consistent demand for silver, alongside gold, indicates a broader trend of investors seeking safe-haven assets amid economic uncertainties.
Gold futures on the Multi Commodity Exchange (MCX) also experienced a notable rise, jumping by Rs 649, or 0.73%, to reach a new peak of Rs 88,672 in afternoon trading. Jateen Trivedi, VP of Research at LKP Securities, attributed this upward momentum to heightened geopolitical tensions and China’s economic stimulus plans, which have further fueled demand for gold.
Anticipation of Federal Reserve Decisions
Looking ahead, market analysts are closely monitoring the upcoming Federal Reserve policy meeting, which is expected to provide clarity on future monetary policy in light of rising economic concerns. Kaynat Chainwala, AVP-Commodity Research at Kotak Securities, emphasized that gold prices this week will be influenced by the Fed’s decisions, as investors await further direction regarding interest rates and economic stability.
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