Global Market Strength Sends Gold to Two-Week Peak; Investors Shift to Safe Haven

Gold prices in the bullion market of the national capital touched a two-week high of ₹1,30,100 per 10 gm on Wednesday due to gains in international markets and expectations of an interest rate cut by the US Federal Reserve. According to the All India Sarafa Association, gold with 99.9 per cent purity jumped ₹1,200 to a two-week high of ₹1,30,100 per 10 gm. Gold with 99.5 percent purity stayed at ₹1,29,500 per 10 gm.

According to analysts, soft comments from Fed officials and weak economic data strengthened the prospect of a rate cut, leading to a rise in gold prices. Spot gold rose 0.81% to $4,164.30 per ounce in the global market.

Silver prices also continued their upward trend, gaining ₹2,300 to reach ₹1,63,100 per kilogram. Spot silver rose 1.71% to $52.37 per ounce in the overseas market. Commodity experts believe that the upside was limited by expectations of Russia-Ukraine peace talks, but fundamental indicators suggest that the path of least resistance for gold is upward.

Analysts say that soft comments from the US Federal Reserve and weak economic data boosted gold demand in global markets. Investors turned to gold as a safe-haven investment even before the release of durable goods orders and unemployment claims data. Kaynat Chainwala of Kotak Securities said that recent comments by Fed Governors Meiran and Waller strengthened the possibility of an interest rate cut, leading to a rise in gold prices.

About silver, analysts said that the upside has been limited by hopes of a Russia-Ukraine peace deal. According to Praveen Singh of Mirae Asset Sharekhan, US economic data along with speculations about the next Federal Reserve Chairman have strengthened the sentiment of a rate cut, thereby increasing the price of both gold and silver.