Gold and Silver Shine Bright on Rate Cut Optimism
In a positive start to the week, gold prices on the Multi Commodity Exchange (MCX) witnessed a significant upswing during early trading on Monday. The rally was primarily fueled by growing market anticipation of interest rate reductions from both the US Federal Reserve and the Reserve Bank of India later this month. This sentiment, combined with consistently strong physical demand for the precious metal, provided a solid foundation for the price increase.
Price Movement in Detail
Around 9:10 am, specific contracts showed notable gains. The MCX gold February futures contract was trading higher, registering an increase of 0.71% at ₹1,30,425 per 10 grams. The rally was not limited to gold, as silver also displayed even stronger momentum. The MCX silver March futures climbed impressively, gaining 1.9% to reach ₹1,78,289 at the same time.
Key Drivers Behind the Rally
Analysts point to two major factors behind this bullish trend. Firstly, the expectation that central banks, particularly the US Fed and the RBI, may initiate a cycle of interest rate cuts is a powerful catalyst for gold. Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold, making them more attractive to investors. Secondly, robust spot demand in the physical market continues to act as a key support level, preventing significant downward corrections and adding stability to the price rally. Market participants are closely watching for official announcements from the central banks for further direction.
This is a developing story. Please check back for fresh updates.
Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
