Representative image of silver and gold.
Credit: iStock Photo
New Delhi: Extending the record-breaking rally, gold prices surged to a new high near Rs 1.60 lakh per 10 grams in the national capital on Wednesday, while silver scaled a fresh peak of Rs 3.34 lakh per kg amid a worldwide chase for safe-haven assets.
According to the All India Sarafa Association, the precious metal of 99.9 per cent purity soared by Rs 6,500, or 4.24 per cent, to Rs 1,59,700 per 10 grams (inclusive of all taxes).
On Tuesday, gold breached the crucial Rs 1.5 lakh-per-10-gram milestone in the national capital for the first time.
Silver prices also continued their blistering jump for the ninth consecutive day and hit a fresh record in the local bullion market. The white metal skyrocketed by Rs 11,300 to Rs 3,34,300 per kilogram (inclusive of all taxes) on Wednesday.
The metal closed Rs 20,400 higher at Rs 3,23,000 per kilogram in the previous market session.
"Gold and silver hit new record highs on Wednesday, witnessing a record-breaking rally that was driven by persistent safe-haven demand and strong inflow into gold-and silver-backed exchange-traded funds," Saumil Gandhi, Senior Analyst - Commodities at HDFC Securities, said.
He added that both metals were traded at a noticeable premium in the domestic market compared with international prices due to tight supply conditions, robust investment demand, and a weaker rupee.
These factors have kept domestic prices elevated relative to global benchmarks, Gandhi said.
According to trading platform FOREX.com, gold breached the $4,800 per ounce level for the first time in the international markets, with spot prices appreciating by $124.97, or 2.62 per cent, to $4,888.46 per ounce.
Spot gold rose over 2 per cent in the global markets as escalating tensions between the US and EU over Greenland, and surging global yields on fiscal and inflation concerns are acting as a solid tailwind, Praveen Singh, Research Analyst, Mirae Asset Sharekhan, said.
Spot silver was trading firm in the overseas trade, with prices up 0.33 per cent to USD 94.91 per ounce on Wednesday, after touching a record of USD 95.89 per ounce in the previous session.
Analysts said the rally in bullion prices is driven by ongoing geopolitical rifts and economic headwinds, which are fuelling the demand for safe-haven assets.
"Investors are closely watching Europe's response to the tariff threat against eight nations opposing the move, as well as developments from Davos, where Trump is expected to discuss the issue with global leaders," Renisha Chainani, Head - Research at Augmont, said.
She said these developments point to a rising wave of "resource nationalism" among major powers, with the US stance toward its NATO allies unsettling global markets.
"Against this backdrop of rising geopolitical risk and macro uncertainty, gold demand has strengthened sharply, with prices potentially extending their rally toward $5,000 per ounce as risk-off sentiment persists," Chainani added.