New Delhi, September 3 (PTI) – In a striking development, gold prices in Delhi have soared to a record high of Rs 1,07,070 per 10 grams, marking a significant increase of Rs 1,000 in just one day. This surge is attributed to a confluence of factors, including expectations of a Federal Reserve interest rate cut, escalating geopolitical tensions, and growing concerns surrounding the U.S. economy.
The Current Gold Market Landscape
According to the All India Sarafa Association, gold of 99.9% purity had closed at Rs 1,06,070 per 10 grams on Tuesday. The latest increase in price reflects a sustained upward trend, as gold of 99.5% purity in the Delhi market has now appreciated for eight consecutive sessions, reaching Rs 1,06,200 per 10 grams (inclusive of all taxes). This is a notable rise from the previous market session, where it settled at Rs 1,05,200 per 10 grams.
In parallel, silver prices have remained stable at Rs 1,26,100 per kilogram, maintaining its all-time high level, as reported by the association. Internationally, spot gold has also seen a remarkable climb, hitting an all-time high of USD 3,547.09 per ounce.
Factors Driving the Surge
Federal Reserve Rate Cut Expectations
Chintan Mehta, CEO of Abans Financial Services, emphasized that the ongoing rise in gold prices is largely driven by strong safe-haven demand. Investors are increasingly turning to gold amid hopes that the Federal Reserve will ease interest rates. Such a move would typically weaken the dollar, making gold more attractive as an investment.
Geopolitical Tensions
The geopolitical landscape has also played a crucial role in driving gold prices higher. Recent events, including a Ukrainian attack that severely impacted Russian oil processing capacity, have heightened concerns over global oil supply. As oil prices rebound from recent lows, inflationary pressures are expected to mount, further supporting gold’s appeal.
Economic Worries in the U.S.
N S Ramaswamy, Head of Commodity and CRM at Ventura, noted that the precious metal’s ascent is not solely a hedge against inflation but also a response to the Federal Reserve’s anticipated interest rate cuts. The uncertainty surrounding U.S. economic policies, particularly those related to tariffs under President Donald Trump, continues to bolster demand for gold.
Market Outlook
As the market looks ahead, attention is focused on upcoming U.S. unemployment data and non-farm payrolls set to be released on Friday. These indicators, combined with expectations of a rate cut, are likely to keep gold prices supported in the near term. Ramaswamy suggests that profit booking in this hot gold rally may not occur soon, indicating sustained interest in the precious metal.
Saumil Gandhi, Senior Analyst – Commodities at HDFC Securities, added that the U.S. administration’s recent announcement to expedite a Supreme Court ruling regarding tariffs—following a court’s decision deeming them illegal—has further fueled uncertainty in the market. This environment of unpredictability has led to increased demand for safe-haven assets like gold.
Conclusion
The recent surge in gold prices to record highs reflects a complex interplay of economic, geopolitical, and market dynamics. As investors navigate these turbulent waters, gold continues to shine as a reliable store of value. With the Federal Reserve’s potential rate cuts and ongoing geopolitical tensions, the outlook for gold remains robust, making it a focal point for investors seeking stability in uncertain times.
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