Gold prices surged by ₹700 to reach a record high of ₹1,24,000 per 10 grams in the national capital on Tuesday, as investors assessed the impact of a potential U.S. government shutdown and increased expectations of further interest rate cuts by the Federal Reserve.
According to the All India Sarafa Association, gold of 99.9 per cent purity had closed at ₹1,23,300 per 10 grams on Monday. In the local bullion market, gold of 99.5 per cent purity rose by ₹700 to touch an all-time high of ₹1,23,400 per 10 grams (inclusive of all taxes) on Tuesday, after settling at ₹1,22,700 per 10 grams in the previous session.
However, silver declined sharply from its record high, plunging ₹3,400 to ₹1,54,000 per kilogram (inclusive of all taxes). The white metal had settled at ₹1,57,400 per kilogram on Monday.
Globally, spot gold traded lower at USD 3,958.18 per ounce after hitting an all-time high of USD 3,977.45 per ounce earlier on Tuesday.
“Gold prices climbed on Tuesday, with spot gold nearing the key USD 4,000-per-ounce level. Expectations of a dovish stance from the Federal Reserve, coupled with strong safe-haven demand, pushed gold to a series of record highs, despite it being technically overbought,” said Saumil Gandhi, Senior Analyst – Commodities at HDFC Securities.
Meanwhile, the ongoing U.S. government shutdown has entered its seventh day with no resolution in sight. “This prolonged shutdown has fueled uncertainty in financial markets, supporting precious metal prices. Furthermore, heightened political tensions in France and Japan, along with persistent geopolitical risks, are adding to the demand for safe-haven assets,” Gandhi added.
Spot silver was quoted 0.12 per cent lower at USD 48.46 per ounce.
Analysts noted that the U.S. government shutdown has delayed the release of key economic indicators, including the September jobs report. The lack of fresh economic data, combined with growing expectations of two rate cuts by the Federal Reserve this year, has further strengthened investor appetite for bullion.
“Additionally, continued gold purchases by global central banks are sustaining the record rally in precious metals,” another expert observed.
According to the latest data from the World Gold Council (WGC), central bank gold buying rebounded in August, with global reserves increasing by 15 tonnes during the month. Data from the People’s Bank of China (PBOC) showed that the country’s gold holdings rose to 74.06 million fine troy ounces at the end of September, up from 74.02 million a month earlier, marking the eleventh consecutive month of bullion accumulation.
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