According to the All India Sarafa Association, the precious metal of 99.5 per cent purity appreciated Rs 1,800 to hit a record high of Rs 1,14,600 per 10 grams (inclusive of all taxes).
In the local bullion market, gold of 99.9 per cent and 99.5 per cent purity dipped Rs 500 each to close at Rs 1,13,300 and Rs 1,12,800 per 10 grams in the previous market session.
“Gold reached another record high on Tuesday with a weak US dollar and growing expectations for multiple rate cuts by the Federal Reserve fuel this rally. The dollar index has dropped to its lowest level in ten weeks, which continues to support the rally in precious metal prices,” said Saumil Gandhi, Senior Analyst – Commodities at HDFC Securities.
In addition, silver climbed Rs 570 to hit an all-time high of Rs 1,32,870 per kilogram (inclusive of all taxes) on Tuesday. The white metal had ended at Rs 1,32,300 per kg on Monday.
“The rally has been further fuelled by US President Donald Trump’s increasing pressure on the Federal Reserve to implement a larger interest rate cut at the FOMC policy meeting. “The recent weak employment data and President Trump’s influence, traders have intensified their bets on more aggressive rate cuts by the Federal Reserve,” Gandhi added. Meanwhile, the dollar index, which tracks the greenback against a basket of six currencies, slipped 0.28 per cent to 97.03, further aiding the bullion prices.
Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities said, “Traders continue to hold long positions with the key drivers being the anticipated dovish Fed stance and ongoing trade deal developments between the US, India, and China.”
In the overseas markets, spot gold rose to scale a fresh peak of USD 3,698.94 per ounce.
“Gold is trading high ahead of the US Fed’s two-day policy meeting that begins later in the day. The Fed is expected to cut interest rates by 25 basis points on Wednesday, the first since December, and markets are almost certain that the easing cycle will continue into the following year,” said Renisha Chainani, Head – Research at Augmont.
Spot silver was quoting 0.10 per cent higher to trade at USD 42.72 per ounce.
“For clues about the direction of future policy, traders will closely watch the Fed’s projections this week, and Fed Chair Jerome Powell’s press conference.
“US macroeconomic data including industrial production and retail sales that are anticipated later later in the day will also be closely by the investors examined to gain more understanding of how strong the economy is,” she added.
Chintan Mehta, Chief Executive Officer at Abans Financial Services said, “Geopolitical risks and ongoing tariff disputes are adding to safe-haven demand. These cross currents are keeping investors anchored to gold as a hedge.”
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