Gold prices shot to record levels on Tuesday, crossing the Rs 1.10 lakh mark in the domestic futures market for the first time.
On the Multi Commodity Exchange (MCX), gold futures for December delivery jumped Rs 458, or 0.41%, to Rs 1,10,047 per 10 grams.
The most-traded October contract also touched a lifetime high of Rs 1,09,000 per 10 grams, gaining Rs 482.
The surge in India mirrored global momentum. Comex gold futures climbed to an all-time peak of USD 3,694 an ounce, lifted by a weaker US dollar and bets of a softer interest rate regime.
The trigger came from last week’s US jobs data, which showed weaker-than-expected hiring. That has strengthened expectations that the Federal Reserve will cut rates at its September 16-17 meeting, with markets now pricing in three cuts through the year.
“Gold hit a fresh all-time high, supported by mounting expectations of Federal Reserve interest rate cuts through year-end. Weak US jobs report last Friday led markets to price in three rate cuts this year, including a 25 basis-point cut at the Fed’s policy meeting next week,” said Jigar Trivedi, Senior Research Analyst at Reliance Securities
Darshan Desai, CEO of Aspect Bullion & Refinery, added that “gold prices are climbing to new highs, driven by expectations of faster interest rate cuts from the US Federal Reserve next week. The short-term sustainability of this rally will largely depend on the revised US jobs data due later today, as well as upcoming inflation figures later this week. Continued ETF inflows, strong central bank purchases, and growing concerns over potential political pressure on the Fed are also likely to keep gold prices elevated.”
The combination of a softer dollar, central bank demand, and expectations of easier US monetary policy has given gold its sharpest rally in months, pulling domestic futures to historic highs.