Gold (metal) prices shot up today on the Multi Commodity Exchange (MCX), reaching an intraday high of Rs 62,771 per 10 gm.
Nearly touching the lifetime high of Rs 64,065 in response to the US Federal Reserve’s hint at a potential rate cut.
Meanwhile, silver prices also witnessed a surge, opening at Rs 72,423 per kg on MCX and peaking at Rs 72,492 per kg.
The international market echoed the sentiment, with gold rates reaching around $2,045 per ounce and silver hovering around $23 per ounce.
The catalyst for this surge lies in the minutes of the US Federal Reserve’s December 12-13 policy meeting, where officials expressed increasing confidence in bringing inflation under control.
The FOMC minutes revealed a consensus among participants that a lower target range for the federal funds rate would be appropriate by the end of 2024.
The meeting also noted growing concerns about the potential damage caused by “overly restrictive” monetary policies to the economy.
This development had an immediate impact on precious metal prices, as investors sought refuge in gold and silver amidst the uncertainty.
The anticipation of a rate cut in the upcoming months has bolstered the precious metals market.
Despite this positive trend, Wednesday saw a significant decline in gold and silver prices following a resurgence in the US Dollar Index, fueled by the Fed minutes that did not signal a dovish tilt despite acknowledging progress in inflation control.
The US Dollar Index reached three-week highs, causing gold prices to hit two-week lows and silver prices sliding to four-week lows.
Market experts have observed that expectations of rate cuts in the upcoming months have fallen below 65%, intensifying the pressure on gold and silver.
However, factors like the rebound in crude oil prices and ongoing tensions in the Red Sea may provide some support at lower price levels.
