Precious Metals Rally on Global Economic Signals
Gold and silver prices experienced significant gains in futures trading on Wednesday, driven by favorable international market trends and growing expectations of monetary policy easing in the United States.
The precious metals surge came after disappointing US economic indicators strengthened predictions that the Federal Reserve would implement an interest rate reduction next month, making non-yielding assets like gold more attractive to investors.
Domestic Market Performance
On the Multi Commodity Exchange (MCX), gold futures scheduled for December delivery witnessed a substantial increase of Rs 475, representing a 0.38 percent rise, reaching Rs 1,25,700 per 10 grams. This upward movement occurred during a business turnover of 7,926 lots.
Silver futures followed the same positive trajectory, with the December contract climbing by Rs 1,388, or 0.89 percent, to settle at Rs 1,57,709 per kilogram. The trading volume for silver reached 8,239 lots, indicating strong market participation.
Rahul Kalantri, Vice-President of Commodities at Mehta Equities Ltd, explained the market dynamics: "Gold and silver prices jumped as delayed US economic data boosted expectations of a December Fed rate cut."
International Market Influence
The global markets mirrored this positive trend, with Comex gold futures for December delivery increasing by $28.20, or 0.68 percent, to reach $4,193.40 per ounce. Simultaneously, silver prices advanced by 1.03 percent to $51.61 per ounce.
Jigar Trivedi, Senior Research Analyst at Reliance Securities, provided additional context: "Gold rose to around $4,190 per ounce, hovering close to a nearly two-week high, following the release of delayed economic data that bolstered expectations of a December rate cut by the US Federal Reserve."
Trivedi further noted that recent economic indicators revealed a slowdown in consumer momentum, with US retail sales increasing by just 0.2 percent in September compared to stronger performance in August. Producer price data confirmed that inflation pressures aligned with market expectations, reinforcing hopes for monetary policy relaxation.
Market participants now assign over an 80 percent probability to a 25 basis points rate cut in December, a substantial increase from approximately 50 percent just one week earlier.
Geopolitical Factors Limiting Gains
Despite the strong bullish momentum, market analysts noted that price gains remained somewhat constrained due to signs of easing geopolitical tensions. Reports of a proposed peace plan between Ukraine and Russia contributed to limiting the upward movement of precious metal prices.
City-Wise Gold Rate Analysis
Across major Indian cities, gold prices showed uniform increases, reflecting the broader market trend:
Bengaluru: 24K gold reached Rs 12,791 per gram (up Rs 87), 22K at Rs 11,725 (up Rs 80), and 18K at Rs 9,593 (up Rs 65)
Delhi: 24K gold priced at Rs 12,806 per gram (up Rs 87), 22K at Rs 11,740 (up Rs 80), and 18K at Rs 9,608 (up Rs 65)
Mumbai: 24K gold stood at Rs 12,791 per gram (up Rs 87), 22K at Rs 11,725 (up Rs 80), and 18K at Rs 9,593 (up Rs 65)
Chennai: 24K gold reached Rs 12,873 per gram (up Rs 87), 22K at Rs 11,800 (up Rs 80), and 18K at Rs 9,845 (up Rs 65)
Kolkata: 24K gold priced at Rs 12,791 per gram (up Rs 87), 22K at Rs 11,725 (up Rs 80), and 18K at Rs 9,593 (up Rs 65)
Other major cities including Hyderabad, Ahmedabad, Jaipur, Bhubaneswar, Pune, and Kanpur showed identical patterns of increase, with 24K gold rising by Rs 87, 22K by Rs 80, and 18K by Rs 65 compared to previous day rates.
The consistent upward movement across all major Indian cities demonstrates the nationwide impact of global economic developments on local precious metal markets, with investors closely monitoring Federal Reserve policy decisions for future price direction.
