Gold Prices Surge to Record High of Rs 1,03,670/10 gm Amid Rupee Decline; Silver Sees Rs 1,000 Drop
Gold prices in the national capital have soared to a record high of Rs 1,03,670 per 10 grams, marking a significant increase of Rs 2,100. This surge, which extends a four-day upward trend, is attributed to strong buying from stockists, a weakening rupee, and growing global uncertainties. The price of gold with 99.9% purity reached this unprecedented level, while the 99.5% purity gold also saw a rise, reflecting a broader trend in the precious metals market.
Factors Driving Gold Prices Upward
The recent spike in gold prices can be linked to several key factors. Analysts note that persistent buying by stockists has played a crucial role in driving demand. Additionally, the Indian rupee has hit an all-time low, closing at 88.19 per dollar, which has raised concerns about the potential impact of US tariffs on India’s economy. Saumil Gandhi, a Senior Analyst at HDFC Securities, highlighted that the weaker rupee has contributed significantly to the rise in gold prices, as it increases the cost of imports. Market participants are also expressing anxiety over escalating trade tensions between the US and India, which has further fueled safe-haven buying of gold.
In the past week alone, gold prices have climbed by Rs 3,300, or 3.29%, indicating a strong upward momentum. In futures trading, contracts for October delivery on the Multi Commodity Exchange (MCX) rose by Rs 713, while December contracts also saw gains. This trend suggests that investors are increasingly turning to gold as a secure investment amid economic uncertainties.
Silver Prices and Market Trends
While gold prices have surged, silver has experienced a slight decline after reaching record highs. In the spot market, silver prices fell by Rs 1,000 to Rs 1,19,000 per kg, down from Rs 1,20,000 the previous day. However, in futures trading, September silver contracts on MCX rose by Rs 651, indicating a mixed performance in the silver market. Trivesh D, COO at Tradejini, noted that despite the recent dip, silver has shown consistent outperformance in recent weeks, driven by strong industrial demand.
The fluctuations in silver prices highlight the complex dynamics of the precious metals market. Analysts suggest that the heightened political uncertainty surrounding potential changes in US monetary policy has sparked increased safe-haven buying of both gold and silver. As investors navigate these uncertainties, silver remains an attractive option due to its industrial applications and potential for price appreciation.
International Market Influences
In the international market, gold prices have remained steady, with spot gold trading at $3,407.39 an ounce in New York. Meanwhile, silver has seen a slight decrease, trading at $38.84 an ounce. Renisha Chainani, Head of Research at Augmont, pointed out that the rise in gold prices is largely driven by safe-haven demand amid concerns over political pressures on the Federal Reserve, which could lead to accelerated interest rate cuts.
Trivesh D further emphasized that silver is currently hovering near a critical resistance level of $39.60 an ounce. If this level is breached, it could potentially push prices towards $44, representing a significant upside for investors. As market participants await the release of the US PCE Price Index, which is the Federal Reserve’s preferred inflation gauge, there is a heightened sense of anticipation regarding how these economic indicators will influence bullion sentiment and monetary policy expectations.
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