Gold prices storm past Rs 1.07 lakh per 10 gm on geopolitical tensions, worries over US economy

Meanwhile, silver prices traded flat at Rs 1,26,100 per kilogram (inclusive of all taxes) on Wednesday, its all-time high level, as per the association.

New Delhi: Gold prices rallied Rs 1,000 to touch a fresh record high of Rs 1,07,070 per 10 grams in the local markets on Wednesday amid hopes of a rate cut by the US Federal Reserve, mounting geopolitical tensions and growing worries around the US economy.

The precious metal of 99.9 per cent purity had closed at Rs 1,06,070 per 10 grams on Tuesday.

In the Delhi market, gold of 99.5 per cent purity extended the gains for the eighth consecutive session, appreciating Rs 1,000, to hit a fresh record high of Rs 1,06,200 per 10 grams (inclusive of all taxes) on Wednesday.

It had settled at Rs 1,05,200 per 10 grams in the previous market session.

Meanwhile, silver prices traded flat at Rs 1,26,100 per kg (inclusive of all taxes) on Wednesday, its all-time high level.

On the MCX, the most traded October contract of gold skyrocketed by Rs 1,148 or 1.08 per cent to hit a fresh peak of Rs 1,06,940 per 10 grams on Wednesday.

The December contract for gold increased by Rs 856 to trade at Rs 1,07,720 per 10 grams. In the intraday, the yellow metal jumped by Rs 1,056 or 0.99 per cent to hit a lifetime high of Rs 1,07,920 per 10 grams on the commodities bourse.

"Gold traded positively and hit record highs on the MCX as well as on Comex, sustaining its bullish momentum as dollar weakness, tariff uncertainty, and geopolitical positioning between the US, India, Russia, and China continue to guide prices higher.

"This week's focus remains on key US macroeconomic data, including ISM Services PMI, jobless claims, and Fed officials' commentary, which will drive near-term sentiment," Jateen Trivedi, Vice-President, Research Analyst - Commodity and Currency, LKP Securities, said.

In addition, silver futures for December contract followed suit and strengthened by Rs 811 or 0.65 per cent to hit a fresh record high of Rs 1,25,341 per kilogram on the Multi Commodity Exchange (MCX).

On the global front, Comex gold futures for December delivery rose more than 1 per cent to hit a record high of $3,630.40 per ounce. Spot gold climbed to hit an all-time high of $3,547.09 per ounce.

"Gold continues to rise higher as safe-haven demand stayed strong amid hopes of Fed easing rates, mounting geopolitical tensions and growing worries around the US economy," Chintan Mehta, CEO, Abans Financial Services, said.

"Later this week, OPEC+ will hold a meeting, while Russia supplies concerns persist as a recent Ukrainian attack hurt 17 per cent of Russian oil processing capacity, due to which oil prices have bounced back from recent lows," Mehta said, adding that "this could weigh on inflation numbers, weakening dollar and supporting gold".

N S Ramaswamy, Head of Commodity and CRM, Ventura, said, "The upside march of the precious metal extends beyond being only a hedge against inflation, as the US Fed is on the stage to start cutting interest rates with hotter inflation.

"Expectations of a rate cut by the US Federal Reserve rate cut this month and lingering uncertainty over President Donald Trump's tariff policies continue to support the yellow metal," Ramaswamy said.

However, spot silver traded 0.11 per cent lower to trade at $40.84 per ounce in New York.

"The market focus has shifted to this week's US unemployment data and non-farm payrolls, which will be released on Friday, which, along with expectations of a rate cut, are likely to keep gold supported. In this hot gold rally, profit booking wouldn't come up soon," he added.

"The US administration announced its intention to request an expedited ruling from the Supreme Court regarding tariffs after a US appeals court deemed them illegal last week. Growing uncertainty and potential trade tensions in the market bolstered demand for safe-haven metal," Saumil Gandhi, Senior Analyst - Commodities at HDFC Securities, said.