Gold prices skyrocketed by ₹5,080 to hit an all-time high of ₹1,12,750 per 10 grams in the national capital on Tuesday in line with strong global trends after surging ₹723 in early Tuesday trade.
According to the All India Sarafa Association, gold of 99.9 per cent purity had closed at ₹1,07,670 per 10 grams on Monday.
Silver prices also surged by ₹2,800 to hit a record high of ₹1,28,800 per kilogram (inclusive of all taxes) on Tuesday. The precious metal had settled at ₹1,26,000 per kg in the previous market session.
In global markets, gold hit an all-time of USD 3,659.27 per ounce on Tuesday. The precious metal later traded at USD 3,652.72 per ounce, up by USD 16.81, or 0.46 per cent.
Gold's record high on Tuesday in the domestic futures market came amid growing expectations of a US Federal Reserve interest rate cut next week, which put pressure on the dollar and boosted the yellow metal’s safe-haven demand.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 97.29, went lower by 0.17 per cent.
On the MCX, the yellow metal futures for December delivery soared ₹723 or 0.65 per cent to hit a fresh peak of ₹1,10,312 per 10 grams.
Also Read: Gold rates hit highest-ever level of ₹1.06 lakh/10 g
While investors await the US Producer Price Index and Consumer Price Index data which are due later this week, trade analysts expect further increase in the gold rate.
"Gold hit a fresh all-time high, supported by mounting expectations of Federal Reserve interest rate cuts through year-end. Weak US jobs report last Friday led markets to price in three rate cuts this year, including a 25 basis-point cut at the Fed's policy meeting next week," said Jigar Trivedi, Senior Research Analyst at Reliance Securities.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 97.33, lower by 0.12 per cent.
Renisha Chainani, Head of Research at Augmont, agreed that it has become more likely for the Fed to announce rate cuts next week.
"Gold has reached new all-time highs above USD 3,695 per ounce to start the week on a strong bullish note. The action builds on last week's surge as investors become more confident that the Fed would lower interest rates at its September monetary policy meeting, a move that markets now regard as almost certain after a run of poor US job market data," Chainani said.
Globally, the exchange-traded funds (ETFs) added 53 tonnes of gold in August, worth roughly USD 5.5 billion. The assets under management by ETFs closed at a month-end high once more, and it is currently only 6 per cent below the peak that was attained during the epidemic, Chainani further added.
"In August, the People's Bank of China continued to diversify its reserves away from the US dollar by increasing its gold holdings for the tenth consecutive month. Last week, the Trump administration took a step to exempt gold and some other metals from its country-based tariffs," she added.
According to the commodities market experts, the prospect of more US sanctions against Russia, following a retaliatory strike by Moscow against Ukraine, also fuelled the safe haven demand.
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