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Gold Hits All-Time High: Gold has created history by crossing the Rs 1.10 lakh mark for the first time. This trend may continue for the time being due to the rise in the international market and weak US economic data. However, investors are advised to remain cautious, as sharp fluctuations in prices are possible.
There was a tremendous jump in the price of gold on Tuesday. In the domestic futures market, gold rose by Rs 458 and reached the historical level of Rs 1,10,047 per 10 grams for the first time. This increase has come due to the rise in international markets and the weakness of the US dollar.
Gold hits record level on MCX
On the Multi Commodity Exchange, gold futures for December delivery rose by Rs 458, or 0.41%, to Rs 1,10,047 per 10 gram. Meanwhile, the most traded contract for October delivery jumped Rs 482, or 0.44%, to a record high of Rs 1,09,000 per 10 gram.
The price of gold rose in the international market
and in foreign markets too, gold reached a new peak. Gold for December delivery in the US market Comex reached US$ 3,694.75 per ounce, which is the highest level ever.
Why did the price of gold increase?
According to Jigar Trivedi, Senior Research Analyst at Reliance Securities, weak US employment data was released last week. This increased the possibility that the Federal Reserve (US central bank) could cut interest rates three times this year. A rate cut of 0.25% (25 basis points) is expected at the next Federal Reserve policy meeting. A reduction in interest rates increases the demand for gold as gold becomes a more attractive option for investors.
Effect of dollar weakness: Gold got direct benefit of the weak US dollar. When the dollar weakens, it becomes cheaper to buy gold in other currencies. This increases its demand internationally and prices go up.
Investors excited due to increase in gold prices: Due to rapidly rising prices, investors have become enthusiastic about gold. Many investors consider it a safe investment, especially in times of economic uncertainty. It is advisable for investors that the volatility in gold may increase further in the coming days.
Where will it have an impact?
There can also be an increase in the prices of gold jewellery in the domestic market. At the same time, customers may have to face expensive gold in the upcoming festive and wedding season.
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