Precious Metals Shine on Rate Cut Expectations
Gold and silver prices witnessed significant upward movement in the domestic futures market during Wednesday morning trading session, propelled by a combination of dollar weakness and growing anticipation of monetary policy easing by the US Federal Reserve. The bullish sentiment extended across both precious metals, with investors positioning themselves for potential rate cuts in December.
Market Performance Details
MCX gold December futures registered a gain of 0.34 percent, trading at ₹124,333 per 10 grams around 9:05 am, reflecting the positive momentum in the precious metals sector. The silver market demonstrated even stronger performance, with December contracts climbing 0.51 percent to reach ₹1,55,480 per kilogram during the same trading period.
The price surge represents the fourth consecutive session of gains for international gold prices, indicating sustained investor confidence in the precious metal. Market analysts attribute this extended rally to expectations that economic data releases following the reopening of the US government will reinforce arguments for a Federal Reserve rate cut in the coming month.
Global Factors Driving the Rally
The current precious metals upswing stems from two primary global factors: the US dollar's recent softness and shifting expectations regarding US monetary policy. A weaker dollar typically makes gold more affordable for holders of other currencies, thereby increasing demand and pushing prices higher. Simultaneously, growing consensus around a potential December rate cut by the US Federal Reserve has created favorable conditions for non-yielding assets like gold and silver.
Market participants are closely monitoring incoming economic data from the United States, particularly information that became accessible after the government resumed normal operations. This data flow is expected to provide clearer signals about the health of the US economy and potentially validate the case for monetary policy easing.
This remains a developing market story, and investors are advised to check for fresh updates as market conditions continue to evolve throughout the trading day.
