Gold Surges on Rate Cut Hopes, Silver Hits Record High
Gold and silver futures experienced significant gains, driven by expectations of a U.S. Federal Reserve rate cut. Gold October futures on MCX rose 0.50% to Rs 1,09,520.00 per 10 grams, while spot gold in the international market increased 0.40% to $3,647.76 per ounce. Silver December futures on MCX reached an all-time high of Rs 1,28,294.00 per kg, up nearly 1.00%. The rally is attributed to anticipated Fed rate cuts, recent U.S. economic data, and falling bond yields. Analysts project gold to trade between $3,622.00 - $3,717.00 per ounce and silver between $41.40 - $42.80 per ounce.
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In a significant market move, gold and silver futures saw substantial gains, driven by growing expectations of a U.S. Federal Reserve rate cut. The precious metals market witnessed a flurry of activity, with both gold and silver reaching notable milestones.
Gold Futures Climb
Gold October futures on the Multi Commodity Exchange (MCX) opened on a strong note, rising by Rs 539 or 0.50% to reach Rs 1,09,520.00 per 10 grams. This upward trajectory aligns with the global trend, as spot gold in the international market rose 0.40% to $3,647.76 per ounce. The yellow metal is on track for its fourth consecutive weekly gain, highlighting the sustained bullish sentiment in the market.
Silver Touches All-Time High
Silver outperformed its golden counterpart, with December futures on MCX reaching a lifetime high of Rs 1,28,294.00 per kg, marking a nearly 1.00% increase. This record-breaking performance underscores the strong demand for the white metal amid current market conditions.
Factors Driving the Rally
Several key factors are contributing to the surge in precious metal prices:
Fed Rate Cut Expectations: The market is anticipating a rate cut by the U.S. Federal Reserve, with most analysts predicting a 25 basis point reduction. There's also a slim possibility of a more aggressive 50 basis point cut.
U.S. Economic Data: Recent economic indicators have fueled the rate cut speculation. The U.S. Consumer Price Index (CPI) data showed a 0.40% monthly inflation in August, higher than the expected 0.30%. Additionally, unemployment claims surged to 263,000, significantly above the anticipated 235,000.
Bond Yield Movement: The U.S. 10-year bond yield dropped below 4.00% for the first time since May 2025, further supporting the precious metals rally.
Market Outlook
Analysts have provided their projections for the precious metals market:
| Metal | Expected Range |
|---|---|
| Gold | $3,622.00 - $3,717.00 per ounce |
| Silver | $41.40 - $42.80 per ounce |
On the MCX, gold is anticipated to find support at Rs 1,08,550.00-1,08,000.00 levels, with resistance expected at Rs 1,09,380.00-1,09,800.00.
Investor Implications
The current market dynamics present both opportunities and challenges for investors. While the rally in precious metals offers potential gains, it's crucial to consider the broader economic context, including inflation concerns and central bank policies. As always, investors are advised to conduct thorough research and consider their risk tolerance before making investment decisions in this volatile market environment.
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