Gold, silver prices hit record highs in India: Here's why
What's the story
Gold and silver prices in India have hit record highs in the domestic futures market today. The MCX Gold October 3 contracts jumped 2% to a record high of ₹1,05,937 per 10gm. Meanwhile, MCX Silver December 5 contracts also reached an all-time high of ₹1,24,214 per kg after gaining nearly 2%. The rise in prices is attributed to strong spot market demand and expectations of a US Federal Reserve rate cut this month.
Market influences
Anticipated US Fed rate cut boosts gold prices
The surge in gold prices is driven by several factors. The main one is the anticipation of a rate cut by the US Federal Reserve this month. After US Fed Chair Jerome Powell hinted at a possible rate cut, other Fed officials have also indicated their support for such a move. In a low-interest-rate environment, gold becomes more appealing because it doesn't have an opportunity cost against other low-yielding investments, and serves as a safe-haven asset.
Economic factors
Trump's tariff talks and weaker dollar index impact gold prices
The uncertainty surrounding Trump's tariffs and their effect on global economic growth is another major factor pushing up gold prices. The Trump administration is in talks with its key trading partners, but the outcome of these negotiations remains uncertain. Additionally, a weaker dollar index has also contributed to the rise in gold prices as it makes the yellow metal cheaper in other currencies, boosting its demand.
Market predictions
Experts predict continued upward trend for gold, silver
Experts expect gold and silver prices to continue their upward trend. They advise against short-selling in these metals and recommend a buy-on-dips strategy. Manoj Kumar Jain of Prithvifinmart Commodity Research predicts that gold could hit ₹1,07,000 while silver could reach ₹1,27,000 in the near term.