Gold Futures Near Rs 1.2 Lakh Amid Safe Haven Rush
On the MCX, gold futures for December delivery gained as much as 2.2% to reach a new high.
Gold prices surged by over Rs 2,500 to a new record of Rs 1,19,933 per 10 grams in the domestic futures trade on Monday, lifted by safe-haven buying amid the prolonged US government shutdown and growing bets on further Federal Reserve interest rate cuts.
On the Multi Commodity Exchange Ltd., gold futures for December delivery gained as much as 2.2% to reach a new high. Last week, the yellow metal futures had surged Rs 3,580 per 10 grams or 3.3%.
According to Kotak Securities, the December contract will face immediate resistance at Rs 1,20,067. Higher prices may trigger short-term profit booking.
In the international market, spot gold prices touched a lifehigh of $3,945 an ounce amid a weak dollar. The relationship between gold and the dollar has historically been inverse.
Renewed concerns over the US government shutdown have reinforced safe-haven demand, keeping precious metals well-supported. The shutdown has increased economic uncertainty and increased the bets of interest rate cut in this year. Investors are now relying on private data for crucial clues about an already murky US economic outlook.
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Gold has surged almost 50% this year, spurred by the massive jolt of economic and geopolitical uncertainty that President Donald Trump has brought to the market. The Federal Reserve’s rate-cutting cycle and central bank purchases to diversify away from dollar assets have also been major tailwinds.
The precious metal has also benefited from the slide in US Treasury yields, with 10-year borrowing costs down 50 basis points.
Silver Prices At New Record
Silver futures also witnessed robust traction. The white metal for December delivery jumped Rs 1,956, or 1.34%, to a fresh peak of Rs 1,47,700 per kilogram. Last week, the metal appreciated by 2.7%.
Globally, silver gained 1.3% to $48.63 on Monday.
The metal's 66% surge this year has carried it to a fourteen-year high with gold trailing behind. The precious metal also benefits from industrial demand in solar, electricity generation and energy technology -- areas where gold has little exposure.
