Gold futures continue to scale new highs. The gold rate today extended the bull run for the 4th consecutive day, surging by Rs 1,899 to hit an all-time high of Rs 99,178 per 10 grams, driven by persistent safe-haven demand. What’s particularly striking is that the October contract breached the Rs 1 lakh mark for the first time on the MCX. It jumped by Rs 2,000 or 2% to hit a record high of Rs 1,00,484 per 10 grams on the bourses. Concerns over the US President Donald Trump’s criticism of Federal Reserve Chair Jerome Powell led to safe haven buying of the yellow metal.
Gold June, August contracts hit fresh high
On the Multi Commodity Exchange (MCX), the most-traded June delivery contracts of the precious metal zoomed by Rs 1,899 or nearly 2 per cent to hit a record high of Rs 99,178 per 10 grams in the initial trade. Later, the June contract traded at Rs 98,880 per 10 grams, up by Rs 1,601 or 1.65%, with an open interest of 22,687 lots. The August contract of the metal jumped by Rs 1,848 or 1.89 per cent to hit a fresh peak of Rs 99,800 per 10 grams. Analysts said the cost of gold today surged on the back of concerns surrounding US monetary policy.
According to Prathamesh Mallya, DVP- Research, Non-Agri Commodities and Currencies, Angel One, “Gold has surged more than 30% this year as trade tensions have caused jitters in the markets boosting the demand for safe haven assets except for the Dollar Index which has plunged by more than 4 percent this year. Strong flows to bullion-backed exchange-traded funds and continued purchases by central banks have also supported the trend.”
Gold: Action in global markets
On the global front, gold futures rose to hit a fresh peak of $3,504.12 per ounce. Later, it pared gains to trade at $3,490.72 per ounce, up by $65.42 or 1.91%. On Monday, Trump reiterated his call for the Federal Reserve to cut interest rates, saying the American economy could slow down if the Fed does not cut interest rates immediately. Gold showed very high price volatility amid uncertainty in the global markets.
Dollar Index at 3-year lows
The dollar index slipped to 3-year lows after the US President Trump and Federal Reserve Chair Jerome Powell’s tussle over interest rate cut. White House economic advisor Kevin Hassett said that President Trump and his team were continuing to study whether they could fire Fed Chair Jerome Powell. Last week, Fed Chair Jerome Powell said that the central bank was not inclined to cut interest rates in the near future, citing the possible inflationary pressures and economic uncertainties stemming from the new tariffs.
With inputs from PTI