The domestic gold price hit new highs on Thursday, October 16, propelled by a global rally, renewed safe-haven demand, and a weaker US dollar. Silver prices also jumped sharply on the Multi-Commodity Exchange (MCX) as investors sought safe havens from heightened uncertainties in global trade.
On the MCX, Gold December futures climbed nearly Rs. 1,200, or 1%, to touch an all-time high of Rs. 1,28,395 per 10 grams, while Silver December futures jumped more than Rs. 1,900, or over 1%, to a fresh peak of Rs. 1,64,150 per kg.
Globally, spot gold reached a new record at $4,225.69 per ounce, while US gold futures were up 0.9% at $4,239.70. The rally came as the US dollar index dropped 0.4%, making gold cheaper for investors holding other currencies.
Gold prices are driven by a combination of international and domestic factors. One of which was the depreciating US dollar and the growing expectation that the Federal Reserve cuts have supported the rally, thus attracting more investors to the precious metal.
At the same time, the rise in geopolitical tensions and sustained uncertainty from the US government shutdown has shifted investors towards safe-haven assets.
Furthermore, renewed tension between the US and China has ramped up global economic risks, after Washington expressed that it may respond to Beijing’s export restrictions on rare earth materials.
In Mumbai, prices remained stable with no change from Wednesday. 24 Carat Gold stood at Rs. 12,944 per gram and Rs. 1,29,440 per 10 grams.
22 Carat Gold was priced at Rs. 11,865 per gram and Rs. 1,18,650 per 10 grams.
In contrast, Chennai saw a sharp uptick in prices. 24 Carat Gold rose by Rs. 44 per gram to Rs. 12,982, and by Rs. 440 per 10 grams to Rs. 1,29,820.
Similarly, 22 Carat Gold gained Rs. 40 per gram to Rs. 11,900, and Rs. 400 per 10 grams to Rs. 1,19,000.
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According to Manoj Kumar Jain of Prithvifinmart Commodity Research, gold is expected to trade between $3,980 and $4,280 per troy ounce. In domestic markets, MCX gold has support at Rs. 1,26,000-Rs. 1,24,400 and resistance near Rs. 1,28,500-Rs. 1,30,000.
Analysts recommend a ‘buy-on-dips’ strategy, with Jain suggesting that gold could be bought between Rs. 1,27,000 and Rs. 1,25,500 for potential targets of Rs. 1,28,500 to Rs. 1,30,000. Similarly, silver could be accumulated near Rs. 1,59,500 to Rs. 1,62,000 for targets up to Rs. 1,66,500.