Gold Price Hits Record High Of Rs 78,900 Per 10 Gram In Retail Market As Diwali Nears

Gold price soared to a record high in the Indian retail market on Wednesday, as demand is poised to pick up ahead of the upcoming Diwali festivities.

The price per 10 grams of 24-karat gold spiked to Rs 78,900, news agency PTI reported citing the rate shared by All India Sarafa Association. This marks a jump of Rs 250 as compared to the closing price of Rs 78,650 per 10 grams on Tuesday.

Gold price in India also picked up at the Multi Commodity Exchange in the backdrop of positive global gold rates. The December contracts were trading Rs 203, or 0.27%, higher at Rs 76,552 per 10 grams as of 8:44 p.m.

In the global gold market, spot gold was trading 0.32% higher at $2,670.78 per ounce 10:44 a.m. (GMT-4). On the COMEX, US gold futures were trading 0.27% higher at $2,686.1 an ounce.

The uptick was driven by increased expectations of a rate cut by the US Federal Reserve. The expectation of a 25 basis points cut in the benchmark lending rates has soared to 94.1%, as against 5.1% who expect a status quo, as per CME Group's FedWatch.

A reduction in lending rates leads to more liquidity in the economy, which in turn raises the demand for gold, seen as one of the top safe-haven assets.

Silver price in India is also edging higher, with the metal crossing the Rs 90,000-mark again in the retail market on Wednesday. The pan-India retail price stood at Rs 91,512 per kilogram, which is nearly 2% higher compared to the price of Rs 89,800 on Tuesday, according to the All India Bullion and Jewellers Association Ltd.

Notably, buying gold and silver is considered auspicious by several Indians on the occasion of Diwali and Dhanteras. As the festive period approaches, a further rise in the gold price and silver price in India could likely be on the cards.