Indian gold and silver futures surged to unprecedented levels early on Monday, reflecting increases in international prices and bolstered by the rupee’s decline approaching an all-time low, according to dealers. Domestic gold futures increased by 0.74%, reaching a record high of Rs 114,627 per 10 grams in early trade, while silver futures surged over 1.3% to Rs 143,968 per kg.
In the global market, gold prices reached an unprecedented peak on Monday, bolstered by a depreciating dollar and increasing anticipations that the Federal Reserve may persist with interest rate reductions in the forthcoming months. Spot gold experienced an increase of 0.8%, reaching $3,789.39 per ounce as of 02:51, following a peak of $3,798.32 earlier in the session. U.S. gold futures for December delivery increased by 0.3%, reaching a price of $3,818.30.
The U.S. dollar index experienced a decline of 0.2% relative to its counterparts, resulting in a decrease in the cost of dollar-denominated bullion for international purchasers. The Personal Consumption Expenditures Price Index increased by 0.3% in August, up from a 0.2% rise in July. “The favorable inflation report in the United States has led market participants to anticipate additional Federal Reserve rate cuts in October and December,” stated analyst Kyle Rodda. Sentiment remains highly optimistic, positioning us to potentially revisit another record high this week.
The current positioning of the gold market leans heavily towards long positions, suggesting a need for caution when considering potential future gains. Market participants are presently assigning a 90% likelihood to a Federal Reserve rate cut in October, alongside an approximate 65% probability for an additional cut in December.