Gold and Silver Surge Amid Weak Rupee and Global Trends
Gold and Silver Prices Surge Amid Global Trends and Weaker Rupee
The prices of gold and silver witnessed a significant rise in the national capital on Tuesday, driven by a weakened rupee and strong global market trends. According to the All India Sarafa Association, gold prices climbed by Rs 600 to Rs 1,00,770 per 10 grams. This comes after 99.9% purity gold had settled at Rs 1,00,170 per 10 grams on Monday.
Gold Price Increase Details
Gold of 99.5% purity also experienced a hike, rising by Rs 500 to Rs 1,00,400 per 10 grams (inclusive of all taxes) compared to its previous close of Rs 99,900 per 10 grams. This surge reflects the growing demand for safe-haven assets among investors amid global uncertainties.
Silver Prices Hit All-Time High
Silver prices also made headlines, rallying by Rs 3,000 to reach their all-time high of Rs 1,18,000 per kilogram (inclusive of all taxes). This marks a sharp rise from its closing price of Rs 1,15,000 per kilogram on Monday.
Factors Driving Precious Metal Prices
Saumil Gandhi, senior analyst - Commodities at HDFC Securities, explained that the upward movement in gold prices is largely attributed to heightened investor demand following U.S. President Donald Trump's dismissal of Federal Reserve Governor Lisa Cook. This decision created concerns about the independence of the central bank and prompted speculation about an interest rate cut, which typically benefits gold as a non-yielding asset.
Additionally, the Indian rupee weakened further, slipping by 12 paise to close at 87.68 against the U.S. dollar on Tuesday, adding more pressure to precious metal prices. Currency markets were shaken by the U.S. government’s draft notice outlining plans to impose an additional 25% tariff on Indian goods.
Global Gold and Silver Trends
In the international market, spot gold gained 0.37% to trade at USD 3,378.37 per ounce in New York. Kaynat Chainwala, AVP Commodity Research at Kotak Securities, noted, "Spot gold surged, buoyed by renewed dollar weakness amid concerns over the U.S. central bank's independence after President Trump dismissed Fed Governor Lisa Cook."
Meanwhile, spot silver saw a small dip of 0.21%, trading at USD 38.48 per ounce. Despite this minor setback, silver remains strong overall due to underlying market conditions and investor interest.
Supporting Factors for Gold's Momentum
Gold received further support from central banks continuing to boost their gold reserves. Chintan Mehta, CEO of Abans Financial Services, pointed out that countries like China and Turkey are actively increasing their gold holdings, which strengthens the metal’s long-term outlook.
Other Contributing Economic Factors
Mehta added that the U.S.'s decision to impose additional 25% tariffs on India starting August 27, combined with ongoing tensions from the Russia-Ukraine conflict, has left global traders skeptical about any progress toward peace. This geopolitical uncertainty offers another layer of support for precious metals like gold.
Investors are now eagerly awaiting key U.S. economic data, including jobless claims and GDP revisions, to better understand the Federal Reserve’s stance on future interest rate adjustments.
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AI contributed to the creation of this article.