New Delhi: Gold prices in the national capital on Tuesday rose by Rs 1,800 to a new peak of Rs 1,15,100 per 10 gram amid a weak US dollar and rising expectations of an interest rate cut by the Federal Reserve.
The price of the precious metal of 99.5 per cent purity rose by Rs 1,800 to a record high of Rs 1,14,600 per 10 gram (inclusive of all taxes), according to the All India Sarafa Association.
In the local bullion market, gold of 99.9 per cent and 99.5 per cent purity closed at Rs 1,13,300 and Rs 1,12,800 per 10 gram, respectively, with a decline of Rs 500 each in the previous session.
“Gold hit another record high on Tuesday on a weaker US dollar and rising expectations of multiple rate cuts by the Federal Reserve. The dollar index fell to a ten-week low, which supported the rally in precious metal prices,” said Saumil Gandhi, Senior Analyst (Commodities), HDFC Securities.
Silver also rose by Rs 570 to hit an all-time high of Rs 1,32,870 per kg (inclusive of all taxes) on Tuesday after closing at Rs 1,32,300 per kg on Monday.
“The rally was driven by US President Donald Trump’s mounting pressure on the Federal Reserve to implement a major rate cut at the FOMC policy meeting,” said Gandhi.
“Recent weak employment data and President Trump’s influence have led traders to raise expectations of more aggressive rate cuts by the Federal Reserve,” Gandhi added.
Meanwhile, the dollar index, which gauges the greenback against a basket of six currencies, fell 0.28 per cent to 97.03, providing further support to bullion prices.
Research analyst Jatin Trivedi, vice-president (commodity & currency), LKP Securities, said, “Traders are maintaining long positions due to expected dovish stance from the Fed and progress in ongoing trade negotiations between the US, India and China.”
In overseas markets, spot gold hit a new peak of $3,698.94 an ounce.
“Gold is trading higher ahead of the US Fed’s two-day policy meeting starting this evening. The Fed is expected to cut interest rates by 25 basis points on Wednesday, the first cut since December, and markets are almost certain that this easing phase will continue into next year,” Augmont’s head of research Renisha Chainani said.
Silver was trading 0.10 per cent higher at $42.72 an ounce.
“Traders will keep a close eye on Fed projections and Fed Chair Jerome Powell’s press conference this week to assess future policy direction.”
“US macroeconomic data, including industrial production and retail sales, which are expected to come this evening, will also be closely studied by investors to get a better idea of the economy’s strength,” she added.
“Geopolitical risks and ongoing tariff disputes are fuelling safe-haven demand,” said Chintan Mehta, chief executive officer, Abans Financial Services. These headwinds are pushing investors to invest in gold.”
