Gold futures climb to Rs 1.25 lakh/10g as investors watch for Fed rate cut next month

On the MCX, gold futures for December delivery appreciated by Rs 1,458, or 1.18 per cent, to Rs 1,25,312 per 10 grams in a business turnover of 8,599 lots.

New Delhi: Gold prices on Tuesday jumped by Rs 1,458 to Rs 1,25,312 per 10 grams in the futures trade, tracking firm global trends as investors raised bets of an interest rate cut by the US Federal Reserve next month after soft signals from its officials.

On the Multi Commodity Exchange (MCX), gold futures for December delivery appreciated by Rs 1,458, or 1.18 per cent, to Rs 1,25,312 per 10 grams in a business turnover of 8,599 lots.

Silver futures also witnessed buying interest in tandem with gold. The white metal for December delivery surged by Rs 2,583, or 1.67 per cent, to Rs 1,57,065 per kilogram in 9,492 lots.

In the international markets, Comex gold futures for December delivery rose USD 47.8, or 1.17 per cent, to USD 4,142 per ounce, marking their third consecutive day of gains.

"Gold prices rose to around USD 4,140 per ounce on Tuesday, building on gains from the previous session as expectations for an interest rate cut next month increased further after dovish Fed signals," Jigar Trivedi, Senior Research Analyst at Reliance Securities, said.

On Monday, bullion prices surged after Federal Reserve Governor Christopher Waller reiterated his support for a December cut, citing persistent weakness in the US labour market. His remarks followed those of New York Fed President John Williams last week, who also indicated that a near-term reduction remains a possibility.

Trivedi said traders are now assigning an 81 per cent probability to a 25 basis points cut in December, up sharply from around 40 per cent a week ago.

Meanwhile, Comex silver futures for December delivery rose by 1.94 per cent to USD 51.30 per ounce in the overseas trade.

The dollar index is stable and was hovering above 100-mark, while optimism over a possible Russia-Ukraine peace deal is limiting gains in gold and silver, Rahul Kalantri, Vice-President of Commodities, Mehta Equities Ltd, said.

Trivedi of Reliance Securities added that investors are awaiting key US data releases for further direction on the bullion prices. "September retail sales and Producer Price Index (PPI) data due later in the day, as well as weekly jobless claims on Wednesday, will provide further clues on the health of the US economy and the likely path of Fed's monetary policy," he said.