Gold prices on the Multi Commodity Exchange reached a record high of Rs 1,17,800 per 10 grams on Wednesday, indicative of robust global sentiment and a notable shift by investors towards safer assets in the context of increased geopolitical and macroeconomic uncertainty. The gold December futures contract was last observed trading at Rs 1,17,689, reflecting an increase of Rs 424 or 0.36% intraday. Meanwhile, silver December futures reached a new high of Rs 1,44,844 per kilogram, with both commodities achieving historic milestones, buoyed by international spot prices that have recently reached unprecedented levels.
On the international stage, gold reached an unprecedented peak on Wednesday as investors sought refuge in safe-haven assets amid escalating concerns regarding a potential U.S. government shutdown. Concurrently, disappointing labor data bolstered anticipations for additional interest rate reductions by the Federal Reserve. Spot gold increased by 0.4%, reaching $3,872.87 per ounce as of 0206. U.S. gold futures for December delivery increased by 0.7%, reaching a price of $3,901.40. On Tuesday, gold and silver concluded with a mixed performance in both the domestic and international markets. The December futures contract for gold concluded at Rs 1,17,265 per 10 grams, reflecting an increase of 0.79%. In contrast, the December futures contract for silver settled at Rs 1,42,145 per kilogram, showing a decline of 0.67%. Gold and silver exhibited significant price volatility in the international markets, retreating from the day’s peak due to concerns over a U.S. shutdown and profit-taking at elevated levels. The U.S. political leaders remain at an impasse regarding a resolution to avert a shutdown, leading to increasing apprehensions that are driving demand for safe-haven assets.
The U.S. Senate was unable to pass legislation aimed at extending government funding, thereby bringing the nation nearer to a shutdown, as President Donald Trump signaled potential further reductions to the federal workforce. The shutdown may postpone the dissemination of critical economic indicators, such as the non-farm payrolls report scheduled for Friday. Gold and silver prices rebounded from their lows during the late evening session as hedgers became more active in safe-haven assets. “The Indian gold and silver imports also reached a new high in September despite record-high prices,” stated Manoj Kumar Jain. The rupee declined to unprecedented lows on Tuesday, which in turn bolstered the prices of gold and silver in the domestic markets. Gold appears to be holding steady; however, caution is advised regarding silver, Jain noted. Today, the US Dollar Index was hovering near the 97.81 mark, gaining 0.04 or 0.04%.
“We expect gold and silver prices to remain volatile this week amid fluctuations in the dollar index, instability in the global financial markets, and in anticipation of the U.S. non-farm employment data. Gold is projected to trade within the range of $3,754-3,920 per troy ounce, while silver is anticipated to trade between $45.50-48.40 per troy ounce this week,” he added. Gold, recognized as a conventional safeguard against economic and political instability, flourishes in a low interest rate setting owing to its lack of yield. The asset has experienced an increase exceeding 47% this year.