Why gold and silver are trading at record high prices
Gold and silver prices soared to unprecedented levels on Friday, driven by strong US inflation data and rumors of a potential rate cut by the US Federal Reserve. Comex gold prices reached an all-time high of $2,412 per ounce. Spot gold prices also hit a record at $2,395 per ounce. Concurrently, gold and silver prices peaked during the early trading session on the Multi Commodity Exchange (MCX).
MCX gold and silver rates in India
The MCX gold rate set a new record today at ₹72,678 per 10g, with the silver rate reaching ₹84,102 per kilogram. This surge in gold and silver prices is attributed to market anticipation of a US Fed rate cut. Anuj Gupta of HDFC Securities and Kaynat Chainwala of Kotak Securities both pointed to this expectation as the driving force behind the price increase.
Analysts predict further growth in precious metal prices
Sugandha Sachdeva of SS WealthStreet anticipates further growth in gold and silver prices. She believes that both metals are on an upward trajectory for 2024 due to geopolitical instability and potential rate cuts by the US central bank. Similarly, Gupta forecasts that gold prices may reach ₹73,500 and ₹75,000 per 10g in the near to mid-term, following a significant breakthrough at the ₹72,500 level.
US inflation exceeds expectations, dampening rate cut hopes
US inflation in March 2024 exceeded expectations, largely due to rising gasoline and shelter costs. This development dampened hopes of a June interest rate cut by the US Federal Reserve. The US consumer price index (CPI) rose 0.4% sequentially, surpassing Wall Street predictions. Over the past year through March, the CPI has risen 3.5% year-on-year, marking the largest increase in six months.