Gold, silver scale fresh highs on global cues, US Federal Reserve rate cut hopes

New Delhi: Gold and silver prices hit fresh peaks on Friday, with the yellow metal hitting Rs 1,13,800 per 10 grams, and silver crossing Rs 1,32,000 per kilogram in the national capital, buoyed by strong global demand and heightened expectations of an interest rate cut by the US Federal Reserve next week.

According to the All India Sarafa Association, the precious metal of 99.9 per cent purity extended gains for the fourth straight session by jumping Rs 700 to hit a record high of Rs 1,13,800 per 10 grams (inclusive of all taxes).

It had closed at Rs 1,13,100 per 10 grams in the previous market session.

The yellow metal prices have added Rs 34,850 per 10 grams or 44.14 per cent in the current calendar year, climbing from Rs 78,950 per 10 grams on December 31, 2024.

In the local bullion markets, gold of 99.5 per cent purity climbed Rs 700 to Rs 1,13,300 per 10 grams (inclusive of all taxes), marking its lifetime peak on Friday.

It had settled at Rs 1,12,600 per 10 grams on Thursday.

"The rally in precious metal prices is driven by recent US macroeconomic data that heightened expectations of multiple interest rate cuts by the Federal Reserve before the end of 2025, which encouraged buying activity in bullion," said Saumil Gandhi, Senior Analyst - Commodities at HDFC Securities.

Meanwhile, silver staged a sharp rebound, snapping its two-day losing streak with a jump of Rs 4,000 to hit an all-time high of Rs 1,32,000 per kilogram.

"Further, the silver rally benefited from a positive trend in industrial metals and a strong inflow from exchange-traded funds," Gandhi added.

The white metal had closed at Rs 1,28,000 per kg as demand remained robust in physical and investment segments, as per the Association.

Silver prices have been on a bull run this year, skyrocketing by Rs 42,300 or 47.16 per cent, from Rs 89,700 per kilogram on December 31, 2024.

In the international markets, spot gold increased by USD 12.69, or 0.35 per cent, to USD 3,646.69 per ounce.

"Gold stayed positive as Comex traded firm at USD 3,647, factoring in expectations of a Fed rate cut next week to support the US economy."

"Despite being in overbought territory, gold continues to enjoy a premium driven by tariff uncertainty and the de-dollarisation theme," said Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities.

According to Praveen Singh, Head of Commodities and Currencies at Mirae Asset ShareKhan, gold is expected to trade with a positive bias, though healthy risk appetite is reducing safe-haven demand in the near term.

Spot silver was quoting 1.82 per cent higher at USD 42.31 per ounce.

"Investors will keep a close watch on the Federal Reserve's tone, upcoming labour market numbers, and the political backdrop in the US, all of which could shape the rate outlook."

"With sticky inflation, shifting expectations on rate cuts, and escalating geopolitical risks, gold remains firmly in the spotlight and traders are bracing for another volatile move higher," Chintan Mehta, CEO, Abans Financial Services, said.