Gold and Silver Prices Hit Record Highs Amid Expectations of US Rate Cut
Gold and silver prices have hit new record highs, driven by investor hopes of a US Federal Reserve interest rate cut, festive buying in India, and a falling US dollar. Experts say these factors are helping push precious metals to their highest levels in months.
In India, the price of 24-carat gold reached Rs 10,499 per gram on Monday, according to the India Bullion and Jewellers Association (IBJA). For 10 grams, it was priced at Rs 105,880 on the MCX (Multi Commodity Exchange). Silver also soared to Rs 1.05 lakh per kilogramme.
Global markets showed similar trends. Spot gold approached $3,493 per ounce, nearing its April high of $3,500. At the same time, December gold futures rose to $3,546.10 per ounce. Silver prices climbed to $40.84 per ounce, the highest since 2011.
Investors in gold ETFs (Exchange-Traded Funds) also saw strong gains. Nippon India Gold BeES increased by 1.49% to Rs 86.61. HDFC Gold ETF rose 1.59% to Rs 89.43, SBI Gold ETF gained 1.67%, and ICICI Prudential Gold ETF jumped 1.77%. Over the past year, gold ETFs have given investors around 40% returns.
Silver ETFs fared well too. HDFC Silver ETF went up by 4.58% to Rs 119.14, while ICICI Prudential Silver ETF and UTI Silver ETF saw gains of over 3.7%. In fact, silver ETFs have delivered about 36% returns in the last year. Additionally, silver ETF inflows hit a three-year high in August, with around 800 million ounces bought during the festive season.
Experts say this rally is mainly due to expectations of a US Fed interest rate cut at their upcoming meeting on September 17-18. Weak US jobs data, concerns about inflation, and increased industrial demand for silver—especially for electric vehicles (EVs) and solar energy—are also fueling the rise. Additionally, a five-year supply shortage is adding to the optimism.
Manav Modi, a precious metals analyst from Motilal Oswal, explained, “Gold prices are climbing to a four-month high and getting closer to the April peak, supported by a weaker US dollar and expectations of a US rate cut soon.” He added that the US dollar is near a one-month low, and recent economic data shows steady growth.
Rahul Kalantri from Mehta Equities noted that the positive trend is also due to low inflation and the weakening US dollar. Investors are waiting for upcoming US employment reports to get more clarity on the market direction.
Overall, the precious metals market remains active and optimistic, driven by global economic trends and local festive demand. Keep an eye on the upcoming US data and Fed decisions, as they could influence prices further.
