Gold prices reached an unprecedented high of Rs 1,12,750 per 10 grams on September 19, 2023, due to positive global cues. The surge comes as analysts predict further rate cuts by the US Federal Reserve, bolstering safe-haven demand prior to remarks from Fed Chair Jerome Powell.
On the Multi Commodity Exchange (MCX), gold futures for October delivery increased by Rs 520 or 0.46%, contributing to the record-breaking rise. Likewise, December contracts rallied by Rs 530 or 0.46% to Rs 1,13,750 per 10 grams, highlighting ongoing bullish sentiment in the market.
Silver, too, witnessed remarkable growth. December silver futures appreciated by Rs 461 or 0.34% to reach a record high of Rs 1,34,016 per kilogram. The March futures increased by Rs 508 or 0.37% to achieve a staggering Rs 1,35,397 per kg on the MCX.
Market analysts attribute the ongoing rally in precious metals to the recent developments from the US Federal Reserve, which cut interest rates by 25 basis points earlier in the month. With expectations of further easing measures due to concerns over the labor market, market sentiment remains high.
Rahul Kalantri, Vice-President of Commodities at Mehta Equities Ltd, stated, “The rally in gold and silver showed no signs of slowing. Gold surged to lifetime highs while silver reached its strongest level in nearly 15 years.” He indicated that the market’s focus now shifts to how the Fed will navigate future interest rate settings.
Kalantri emphasized that stable demand for precious metals continues as safe-haven purchases increase amid global tensions. “Persistent central bank purchases, strong ETF inflows, and safe-haven buying further fueled the strength of these metals,” he noted.
Internationally, the price of gold futures for December delivery reached USD 3,794.82 per ounce, reflecting abundant investor interest in gold amid fluctuating currency values. Jigar Trivedi, Senior Research Analyst at Reliance Securities, remarked, “Gold hit a fresh record high, supported by hopes of more interest rate cuts from the Federal Reserve this year.” He remarked that current economic weaknesses could prompt market players to anticipate two additional 25-basis-point cuts in the upcoming months.
However, silver futures for December slipped marginally, settling at USD 44.19 per ounce as traders adjust positions ahead of key economic indicators.
Market participants are keenly awaiting Jerome Powell’s comments on the economic outlook, particularly his position on monetary policy adjustments. The upcoming release of the Personal Consumption Expenditures price index, which the Fed employs to gauge inflation, adds to the anticipation.
Analysts point out the various geopolitical risks influencing market behaviors. The ongoing conflicts in the Middle East and the protracted Russia-Ukraine war have intensified the flow of safe-haven investments in gold and silver, mitigating potential corrective trends despite prices reaching historic highs. Investors remain vigilant, prepared to respond to any shifts in the geopolitical landscape.
As the market reacts to these developments, gold’s ascent to record prices reflects broader economic currents influenced by both domestic and international factors, underscoring the precious metal’s continued appeal amidst uncertainty.
