Gold prices surged by Rs 1,500 to reach Rs 1.56 lakh per 10 grams in the national capital on Tuesday, while silver recorded a sharp rally of more than 4 per cent to touch Rs 2.77 lakh per kilogram. The strong rise in precious metal prices was largely driven by the rupee’s steep decline against the US dollar and continued investor caution amid escalating geopolitical tensions in West Asia.
According to the All India Sarafa Association, gold of 99.9 per cent purity climbed by Rs 1,500, or nearly 1 per cent, to Rs 1,56,800 per 10 grams, inclusive of taxes. In the previous trading session, the yellow metal had settled at Rs 1,55,300 per 10 grams.
Saumil Gandhi, Senior Analyst–Commodities at HDFC Securities, said domestic gold prices remained well supported because of the weakness in the Indian currency and resilient investor sentiment.
Also read: Rupee falls to record low of 95.58 against US dollar
The rupee weakened further on Tuesday, depreciating by 35 paise to close at an all-time low of 95.63 against the US dollar. Analysts noted that the continued fall in the domestic currency significantly boosted gold prices in the Indian market by making imports more expensive.
Silver prices also witnessed a major jump, rising Rs 12,000 or 4.53 per cent to Rs 2,77,000 per kilogram, inclusive of taxes. The white metal had ended Monday’s session at Rs 2,65,000 per kilogram, according to the association.
Gaurav Garg, Research Analyst at Lemonn Markets Desk, said both gold and silver attracted buying interest as investors closely monitored developments in relations between Washington and Tehran while awaiting key US inflation data for further economic signals.
Despite the gains in the domestic market, precious metals traded lower internationally. Spot gold declined by USD 42.33, or about 1 per cent, to USD 4,692.64 per ounce in overseas markets, while spot silver slipped 3.04 per cent to USD 83.49 per ounce.
Brokerage firm Kotak Securities said international gold prices retreated from a three-week high and hovered near the USD 4,700-per-ounce mark. Silver also dropped below USD 85 per ounce, weighed down by a stronger US dollar and rising US Treasury bond yields.
Market sentiment in the bullion segment remained cautious after US President Donald Trump reportedly remarked that the Iran ceasefire agreement was ‘on life support’ following Tehran’s rejection of Washington’s latest peace proposal. The developments kept geopolitical uncertainty elevated and also pushed crude oil prices higher.
Analysts believe that ongoing geopolitical tensions and persistent inflation concerns could continue to support safe-haven demand for bullion in the coming weeks. However, they also cautioned that rising bond yields, a strengthening dollar, and expectations of a hawkish stance from the US Federal Reserve may limit further upside in gold and silver prices in the near term.
Follow us
