New Delhi: Gold price jumped Rs 700 to hit a record high of Rs 1,24,000 per 10 grams in the national capital on Tuesday as investors weighed the risk of an ongoing US government shutdown and growing bets of additional rate cuts by the Federal Reserve.
According to the All India Sarafa Association, the yellow metal of 99.9 per cent purity had closed at Rs 1,23,300 per 10 grams on Monday.
In the local bullion market, gold of 99.5 per cent purity appreciated by Rs 700 to hit a lifetime peak of Rs 1,23,400 per 10 grams (inclusive of all taxes) on Tuesday. It had settled at Rs 1,22,700 per 10 grams in the previous market session.
However, silver retreated from its all-time high level, and plunged Rs 3,400 to Rs 1,54,000 per kilogram (inclusive of all taxes). The white metal had ended at Rs 1,57,400 per kg on Monday.
On the global front, spot gold was trading lower at USD 3,958.18 per ounce. The yellow metal had hit an all-time high of USD 3,977.45 per ounce on Tuesday.
“Gold prices rose on Tuesday, with spot gold approaching the important milestone of USD 4,000 per ounce.
“Expectations of a dovish monetary policy from the Federal Reserve, along with ongoing demand for safe-haven assets, drove the gold price to hit a series of record highs, even as it was technically in overbought territory,” said Saumil Gandhi, Senior Analyst – Commodities at HDFC Securities.
Meanwhile, the US government shutdown has reached its seventh day, and there is still no resolution in sight.
“This shutdown has created uncertainty in financial markets and is providing a boost to precious metals. Additionally, the ongoing political tensions in France and Japan, along with persistent geopolitical risks, are increasing demand for safe-haven assets,” Gandhi added.
Spot silver was quoting 0.12 per cent lower at USD 48.46 per ounce.
Analysts said the ongoing US government shutdown has delayed the release of crucial economic data, including the September jobs report.
The absence of official US macroeconomic indicators, coupled with rising expectations of two Federal Reserve rate cuts this year, has further strengthened demand for the bullion prices.
“Additionally, sustained gold buying by global central banks also continues to power the record rally in the precious metal prices,” an expert said.
The latest data from the World Gold Council (WGC) showed that central bank gold buying rebounded in August, with global reserves rising by 15 tonnes during the month.
According to data from the People’s Bank of China (PBOC), the country’s gold holdings totalled 74.06 million fine troy ounces at the end of September, up from 74.02 million in the previous month, as the central bank expanded bullion purchases for the 11th straight month.–(PTI)
