Gold and Silver Price has set a new record before Diwali

The government had reduced the basic customs duty on gold and other metals in July. Local markets then showed a sharp 7 percent fall in prices of gold and silver. Factors such as the ongoing festive season, expectation of rate cuts in the US along rising geopolitical tensions have once again increased the prices of gold and silver.

In the view of Jatin Trivedi, VP Research Analyst, Commodity and Currency at LKP Securities, "The biggest reason for the rise in gold is the interest rate cycle. Uncertainty over the results of the upcoming US presidential elections is also playing a role in keeping gold prices high."

As per Saumil Gandhi, Senior Analyst-Commodities, HDFC Securities, "Investors are betting on gold amidst a volatile environment. "Besides, possibilities of further escalation in the Middle East tensions are also drawing traders to gold and hence the price of gold is rising.

Gold and silver have performed very strongly. The prices of gold reached new highs while silver has reached a new 12-year high at US$ 35 an ounce," said Rahul Kalantri, Vice President, Commodities at Mehta Equities Limited. Silver, which opened in the green, fell 0.86 per cent to US$ 34.74 an ounce in the Asian market. During the day, it touched a new peak of US$ 35.055 an ounce.

Saumil Gandhi, Senior Analyst, Commodities at HDFC Securities, said, "Investors are turning to gold in an environment of instability. At the same time, the possibility of further escalation of tensions in the Middle East is also pulling traders towards gold. This is leading to a rise in the price of gold."