Gold and silver prices hit fresh record highs on September 22, buoyed by global uncertainties and other factors. This comes amid weak market sentiment, with benchmark indices Sensex and Nifty trading in the red.
Gold futures on Multi Commodity Exchange (MCX) with October expiry hit a fresh lifetime high of Rs 1,10,698 per 10 grams. Contracts with December expiry meanwhile hit a lifetime high of Rs 1,11,820 per 10 grams.
Domestic gold prices also jumped, with the price of 24k gold rising Rs 430 per 10 grams to Rs 1,12,580, according to data on Good Returns.
Silver futures at lifetime high:
Along with gold, silver futures also hit fresh lifetime highs. Silver futures with December expiry hit a fresh lifetime high of Rs 1,32,424 per kg, while those with March expiry hit an all time high of Rs 1,33,687 per kg.
The domestic price of one kilogram of silver jumped Rs 3,000 in one day to Rs 1,38,000, according to data on Good Returns.
'Gold traders bet on two more rate cuts by Fed'
"Gold jumped 1.1% as traders bet on two more rate cuts from the Fed before year-end while oil slipped a similar amount as President Trump doubled down on his calls for Europe to stop buying Russian oil," said Axis Securities in its report on Commodity Weekly Insights.
Ross Maxwell, Global Strategy Lead at VT Markets, said numerous bullish signals for gold persist. "The deceleration of U.S. economic growth, enduring risks associated with inflation, robust demand from central banks, and projections of additional rate cuts later this year collectively bolster gold's long-term prospects," he said.
What to watch out for?
"Still, there remains downside risks in the short term. Should reduction expectations be pushed back, or if economic indicators remain better than forecast, gold may come under further strain. Longer term, however, should cuts in rates occur, inflation remain at elevated rates, or the dollar weaken, gold may regain steam and reach new highs once more," he added.
The US Federal Reserve reduced its policy repo rate by 25 basis points to an 4.00 percent-4.25 percent target range on September 17, marking its first reduction since December 2024 and widely in line with expectations. "Gold's response was confused, initially spiking to an all-time high before falling back. The cut in rates was widely factored in, prompting a "buy the rumor, sell the fact" move," said Puneet Singhania, Director at Master Trust Group.
"Gold historically does well during rate-reduction cycles, particularly if inflation persists at higher levels. Longer-term investors can purchase on corrections, considering gold as an inflation and risk hedge. Be attentive to direction from spread positions and key events such as October's jobs report and November's meeting of the Fed," he added.
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