New Delhi: Gold prices rose by Rs 100 to Rs 75,650 per 10 grams in the national capital on Thursday due to increased demand from local jewellers and strong global cues after the US Federal Reserve cut interest rate.
The precious metal of 99.9 per cent purity had closed at Rs 75,550 per 10 grams on Wednesday.
Silver prices rose for the sixth straight session, climbing by Rs 500 to touch Rs 91,000 per kg on Thursday, according to All India Sarafa Association. It had closed at Rs 90,500 per kg in the previous session. In the six trading sessions, silver prices have zoomed by Rs 7,200 per kg.
Additionally, gold of 99.5 per cent purity increased by Rs 100 to Rs 75,300 per 10 grams on Thursday.
Traders attributed the rise in yellow metal prices to a pick-up in demand by local jewellers and retailers in the domestic markets.
Meanwhile, gold and silver prices skyrocketed in the futures trade. On MCX, gold contracts for October delivery jumped by Rs 498 or 0.68 per cent to Rs 73,553 per 10 grams.
Silver contracts for December delivery bounced Rs 2,105, or 2.38 per cent, to reclaim Rs 90,404 per kg on the exchange.
The spike was fueled by the US Federal Reserve’s decision to cut its key interest rate by 50 basis points bringing it down to a range of 4.75 per cent to 5 per cent.
This is the first time since 2020 that the Fed has reduced interest rates. The decision was made to address concerns about slowing economic growth and easing inflation in the American economy.
In the international markets, Comex gold bounced 0.45 per cent to trade USD 2,610.20 per ounce hitting an all-time high.
“Gold prices recovered from an earlier loss and traded higher on Thursday, supported by a pullback in the US dollar and Treasury yields,” Saumil Gandhi, Senior Analyst of Commodities at HDFC Securities, said.
According to Unmesh Kulkarni, Managing Director – Senior Advisor, Julius Baer India, the focus of the gold market has fully shifted away from Chinese investment demand and central bank buying to the outlook for interest rate cuts in the West.
In the near-term, we remain constructive on gold. Expectations of lower interest rates are propping up sentiment in the futures market and luring safe-haven seekers back into the physical market, Kulkarni said.
In Asian trading hours, silver also quoted higher by 2.58 per cent to USD 31.48 per ounce.
“Traders anticipate that both gold and silver will benefit from this easing of monetary policy, aside from short-term volatility, as the US dollar weakens and the yield curve steepens,” Anindya Banerjee, SVP, Head of Research of Currency, Commodity & Interest Rates at Kotak Securities, said.
Gold prices could range between USD 2,530 and USD 2,630 per ounce, while silver may trade within a band of USD 30 to USD 32 per ounce, Banerjee added.
