New Delhi, Oct 21 (PTI) Gold price surged by Rs 750 to hit a record high of Rs 80,650 per 10 grams while silver skyrocketed by Rs 5,000 per kg in the national capital on Monday, according to the All India Sarafa Association.
Amid the intensifying conflict in the Middle East, an interest rate cut by the People’s Bank of China (PBoC) aided the rally in the yellow metal as investors moved towards the safe haven assets, traders said.
Extending its gains for the fourth straight day, silver price zoomed by Rs 5,000 to hit a fresh record high of Rs 99,500 per kg from the previous close of Rs 94,500 per kg on Friday.
According to commodities market experts, the ongoing bullish sentiment in the silver market is primarily driven by industrial demand and gold’s rally.
Silver’s upward momentum appears strong. Investors are likely to continue to view dips as buying opportunities, keeping the white metal well-supported in the coming sessions, they said.
Additionally, gold of 99.5 per cent purity climbed Rs 750 to hit a record high of Rs 80,250 per 10 grams. The metal of 99.5 per cent purity had ended at Rs 79,500 per 10 grams while gold of 99.9 per cent purity had settled at Rs 79,900 per 10 grams on Friday.
Bullion traders attributed the jump in gold prices to pick-up in buying by local jewellers to meet increased demand in the festive and wedding season.
Further, a positive trend in the overseas markets as well as a fall in equity markets boosted the gold’s safe-haven appeal, they added.
In July, gold and silver prices corrected sharply by 7 per cent in the local markets after the government slashed basic customs duty on gold and other metals.
However, the bullion prices rebounded as demand from Indian consumers increased due to ongoing festivals.
In futures trades on the Multi Commodity Exchange (MCX), gold contracts for December delivery jumped Rs 493 or 0.63 per cent to Rs 78,242 per 10 grams.
During the day, the precious metal had surged Rs 591 or 0.76 per cent to hit record Rs 78,340 per 10 grams.
Silver contracts for December delivery bounced Rs 2,822 or 2.96 per cent to hit a high of Rs 98,224 per kg.
“Silver prices have gained strong upward momentum. As gold prices soar, retail buyers are increasingly turning to silver, viewing it as a relatively cheaper alternative at these levels, especially with gold now touching Rs 78,000 for 10 grams.
“On the MCX, silver prices have surged to Rs 98,000, supported by Comex silver climbing to USD 34 per ounce. A breach of the USD 34-mark has triggered fresh buying interest in silver, as market participants anticipate further gains,” Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities, said.
The rise in silver is being driven not only by its appeal as a more affordable precious metal but also by increasing demand from the electric vehicle (EV) sector and photovoltaic applications, which is expected to sustain global demand in the medium to long term, Trivedi added.
Globally, Comex gold futures went up 0.52 per cent to USD 2,744.30 per ounce.
“Gold rose to another new all-time high, trading near the USD 2,730-level in the European trading hours on Monday, fuelled by safe haven buying and prospects of ongoing monetary easing from the western central banks,” Saumil Gandhi, Senior Analyst – Commodities at HDFC Securities, said.
Apart from geopolitical risks, investors are closely monitoring the upcoming presidential election in the US, contributing to the increased risk premium in bullion. Gold became a safe haven for buyers during a time of uncertainty, Gandhi added.
Meanwhile, silver futures spiked 2.91 per cent to hit a 12-year high of USD 34.20 per ounce in the Asian market hours.
“Gold/ Silver scales to yet another all-time high in the domestic market following cues from overseas market, which were boosted by China’s 25 basis points rate cut, and with continued support from festive demand in some of the Asian centres.
“Safe-haven demand rose due to geo-political uncertainty, buying among ETF investors, and expectation of more rate cuts from global central banks,” Pranav Mer, Vice President, EBG – Commodity & Currency Research, JM Financial Services Ltd, said.
However, traders will remain a little cautious as a round of profit-booking cannot be ruled out, Mer said. PTI HG HG ANU ANU
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