Gold prices hit record high, silver rates continue to surge

Gold prices today surged to record highs in Indian markets, reflecting a firming global trend. On MCX, gold prices hit a new high, after August contracts surged 0.65% to ₹35,409 per 10 gram. Similarly, October gold contracts approached ₹36,000 mark when they surged over 0.7% to ₹35,965. Tracking gold, silver prices also zoomed with September contracts on MCX rising over 1% to ₹41,218. In Delhi spot market, gold and silver prices continued their rally. Gold rose by ₹280 to ₹35,950 per 10 gram while silver crossed ₹42,000 mark, according to the All India Sarafa Association.

In the national capital, gold of 99.9 per cent and 99.5 per cent purity gained ₹280 to ₹35,950 and ₹35,780 per 10 gram, respectively.

In global markets, gold prices today hit a six-year high when rates surpassed the key $1,450 level - the first time since May 2013 - after comments from a top Federal Reserve official bolstered expectations of an interest rate cut.

Spot gold hit $1,452.60 an ounce before shedding easing to $1,442 while US gold futures jumped 1.1% to $1,444.10 an ounce.. So far this week, gold prices have gained nearly 2%.

"Bullion prices traded higher with international spot gold prices touching $1,452.95 on Friday and currently trading near $1,440. Silver prices gained momentum on expectations of revival in industrial demand on monetary easing from major central banks," HDFC Securities Senior Analyst (Commodities) Tapan Patel said.

Bets on a half percentage point rate cut from US Fed climbed after New York Fed President John Williams, at a central banking conference on Thursday, said policymakers need to add stimulus early to deal with lower inflation when interest rates are near zero and cannot wait for an economic disaster to unfold. Another top Fed official, Vice Chairman Richard Clarida, earlier had stressed the need to act quickly if the US economy looked likely to stumble.

Williams' remarks sent the US dollar and bond yields lower, boosting the appeal of non-interest yielding assets like gold. Uncertainty in the Middle East also boosted gold's safe-haven appeal. The US on Thursday said its Navy ship had "destroyed" an Iranian drone in the Strait of Hormuz after the aircraft threatened the vessel, but Iran said it had no information about losing a drone.

Reflecting investor optimism, holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 1.42% to 814.62 tonnes on Thursday from 803.18 tonnes the previous day.

In global markets silver prices also showed a hardening trend, rising 0.5% to $16.42 per ounce, its highest since June 25, 2018. Silver has risen 8% so far this week, on track for its best week in three years.

Gold prices also got a boost after billionaire hedge-fund manager Ray Dalio advised buying the metal. In the past month, banks including Goldman Sachs Group Inc., Citigroup Inc. and Morgan Stanley have raised their forecasts for bullion amid slowing economies, lower interest rates and rising global tensions. Buying from global central banks has also supported the upmove in gold prices. (With Agency Inputs)