Gold prices hit record high of Rs 1,27,500/10g, silver rallies amid US-China trade conflicts. Should you buy?
The yellow metal was last seen trading at Rs 1,26,798, up Rs 542 or 0.43% from the previous close.
Silver prices also mirrored the strength in bullion, jumping Rs 1,090 or 0.68% to Rs 1,60,594 per kilogram, driven by a combination of safe-haven flows, industrial demand prospects, and ongoing trade tensions between the US and China.
Internationally, gold prices rose on Wednesday, hovering near record highs, as investors flocked to safe-haven bullion after renewed U.S.-China trade tensions deepened global uncertainty, with expectations of further U.S. interest rate cuts adding to the momentum.
Spot gold was up 0.4% at $4,155.99 per ounce, as of 0032 GMT. U.S. gold futures for December delivery gained 0.3% to $4,174.30.
Bullion, which yields no interest and is considered a safe-haven during broader uncertainty, has gained 55% year-to-date and touched a record high of $4,179.48 on Tuesday.On Tuesday, gold and silver settled on a positive note in the domestic market and international markets. Gold December futures contract settled at Rs 1,26,256 per 10 grams with a gain of 1.31% and silver December futures contract settled at Rs 1,59,504 per kilogram with a gain of 3.14%.Gold and silver extended their gains in a highly volatile session after the U.S. Fed Chairman’s speech. The U.S. Fed Chairman stated that there has been little improvement in the U.S. job market and inflation following the September policy meeting, but U.S. growth could be better than expected. He also showed his concerns due to the continuous U.S. shutdown.
Powell added that interest rate decisions would be made on a “meeting-by-meeting” basis, balancing labour market weakness with persistent inflation above target. Investors expect a 25-basis-point rate cut at the upcoming Fed meeting this month, with a similar reduction anticipated in December.
After his comments, markets recovered from the day’s low and maintained their bullish momentum.
“Global uncertainty and safe-haven buying are also supporting both precious metals. We expect gold and silver prices to remain volatile this week amid volatility in the dollar index, volatility in the global financial markets and the US-China trade conflict. Gold prices are expected to trade in the range of $3,910-4,240 per troy ounce and silver is expected to trade in the range of $47.70-53.50 per troy ounce this week,” said Manoj Kumar Jain of Prithvifinmart Commodity Research.
Today, the US Dollar Index, DXY, was hovering near the 98.85 mark, falling 0.19 or 0.20%.
What is driving the rally in gold?
Gold’s rally is driven by multiple factors, including geopolitical and economic uncertainties, expectations of U.S. interest rate cuts, strong central bank buying, the de-dollarisation trend and robust ETF inflows.
How to trade gold?
Manoj Kumar Jain suggested the following ranges for gold and silver on MCX:
- Gold has support at Rs 1,25,000-1,23,800 and resistance at Rs 1,27,400-1,28,500
- Silver has support at Rs 1,58,000-1,55,500 and resistance at Rs 1,61,600-1,64,000
Jain suggests buying in gold around Rs 1,25,000-1,24,000 with a stop loss of Rs 1,22,200 for a target of Rs 1,27,400-1,28,500 and also suggests buying silver around Rs 1,58,000-1,56,000 with a stop loss of Rs 1,53,800 for a target of Rs 1,61,000-1,64,000.
Gold rates in physical markets
Gold Price today in Delhi
Standard gold (22 carat) prices in Delhi stand at Rs 94,184/8 grams, while pure gold (24 carat) prices stand at Rs 1,01,264/8 grams.
Gold Price today in Mumbai
Standard gold (22 carat) prices in Mumbai stand at Rs 93,912/8 grams, while pure gold (24 carat) prices stand at Rs 1,00,968/8 grams.
Gold Price today in Chennai
Standard gold (22 carat) prices in Chennai stand at Rs 93,992/8 grams, while pure gold (24 carat) prices stand at Rs 1,01,128/8 grams.
Gold Price today in Hyderabad
Standard gold (22 carat) prices in Hyderabad stand at Rs 94,264/8 grams, while pure gold (24 carat) prices stand at Rs 1,01,376/8 grams.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)