NewKerala.com

Gold and Silver Rally: How Fed Rate Cut Hopes Fuel Precious Metals Boom

Gold and silver prices are continuing their upward momentum for the second straight day. The rally is primarily driven by growing expectations of a Federal Reserve interest rate cut next month. Weak US economic data including slower retail sales growth has weakened the dollar, making gold more attractive internationally. While geopolitical developments could limit further gains, analysts remain optimistic about precious metals amid current market conditions.

Key Points: Gold Silver Prices Rise on Fed Rate Cut Expectations

  • Gold December futures rise 0.50% to Rs 1,25,835 per 10 grams on MCX
  • Silver gains 0.91% to Rs 1,57,750 per kg amid strong spot demand
  • Dollar index falls to 99.60, making gold attractive for global buyers
  • US retail growth slows to 0.2% in September, boosting rate cut expectations
2 min read

Gold, silver extend gains on Fed rate cut hopes

Gold and silver extend gains amid Fed rate cut hopes, with MCX gold hitting Rs 1,25,835 and silver at Rs 1,57,750. US economic data weakens dollar, boosting precious metals.

"In INR gold has support at Rs1,24,350-1,23,580 while resistance at Rs1,25,850-1,26,500 - Analysts"

Mumbai, Nov 26

Gold and silver prices continued their upward trend on Wednesday, rising by more than half a per cent in early trade.

The gains came a day after both metals posted over 1 per cent growth, supported by strong demand in the spot market and rising expectations of an interest rate cut by the US Federal Reserve.

During the early trade, MCX gold December futures were trading 0.50 per cent higher at Rs 1,25,835 per 10 grams.

MCX silver December futures were also up 0.91 per cent at Rs 1,57,750 per kg.

"In INR gold has support at Rs1,24,350-1,23,580 while resistance at Rs1,25,850-1,26,500. Silver has support at Rs1,54,850-1,53,600 while resistance at Rs1,57,110, 1,58,000," analysts said.

In the international market, gold prices touched a near two-week high as new US economic data weakened the dollar and strengthened hopes of a Fed rate cut next month.

The dollar index slipped to around 99.60, its lowest level in a week, making gold more attractive to global buyers.

Meanwhile, the benchmark 10-year US Treasury yield hovered near the one-month low it had hit in the previous session.

Fresh economic signals from the US added to the optimism. Retail sales for September grew by just 0.2 per cent, slower than the 0.6 per cent rise seen in August.

The latest Producer Price Index (PPI) data also matched forecasts, showing a 0.3 per cent increase for the month.

Both reports were released on Tuesday after being delayed due to a record 43-day government shutdown that had halted the release of several key economic indicators.

While the possibility of a Fed rate cut continues to support gold prices, geopolitical factors could limit the metals’ upward movement.

US President Donald Trump has announced parallel missions to Moscow and Kyiv to push forward a US-backed peace plan, raising hopes of progress toward ending the Russia-Ukraine conflict.

If tensions ease, safe-haven demand for gold may soften. Analysts said that gold and silver remain firm as markets await further clarity on US monetary policy and global geopolitical developments.

- IANS

Share this article:

Reader Comments

R
Rohit P
As someone who invests regularly in gold ETFs, I'm happy to see this trend. The Fed rate cut expectations combined with strong Indian demand during wedding season is creating the perfect storm for gold prices. Smart investors should consider systematic investment in gold funds.
A
Arjun K
₹1,25,835 for 10 grams! My mother bought gold at ₹45,000 just 10 years back. This is why Indians trust gold more than any other investment. It never disappoints in the long run. 🏆
S
Sarah B
While the analysis is good, I wish the article had more insights on how this affects small investors. Most middle-class families buy gold for weddings and festivals, not for trading futures. The spot market perspective would be more helpful for regular buyers.
V
Vikram M
Silver at ₹1,57,750 per kg is looking attractive for investment. With industrial demand growing and it being more affordable than gold, this might be a good entry point for young investors. Silver has given better returns than gold in some periods.
M
Michael C
The US economic data driving this trend shows how interconnected global markets are. Even though we're in Mumbai, what happens with the Fed directly impacts our gold prices. Important reminder that we're part of a global economy now.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

Leave a Comment

Minimum 50 characters 0/50