Gold prices rallied by Rs 550 to Rs 75,700 per 10 grams in the local market on Tuesday on the back of fresh buying by jewellers as well as strong trends in the international markets.
According to All India Sarafa Association, the precious metal rates had closed at Rs 75,150 per 10 grams on Monday.
In the national capital, gold of 99.9 per cent and 99.5 per cent purity quoted higher at Rs 75,700 per 10 grams and Rs 75,350 per 10 grams, respectively.
Traders attributed the rise in gold prices to a pick-up in demand by local jewellers and retailers in the domestic market.
In addition, silver prices also jumped by Rs 400 to Rs 94,400 per kg. It had ended at Rs 94,000 per kg in the previous session.
“Gold and silver prices witnessed a sharp recovery on the back of rate cut expectations.
“No major data points were scheduled on Monday, however, comments from US Federal Reserve Chair Jerome Powell were in limelight,” Manav Modi, Senior Analyst, Commodity Research, Motilal Oswal Financial Services Ltd (MOFSL), said.
Fed Chair Powell said that second quarter data has given policymakers greater confidence that inflation is heading down to the central bank's 2 per cent goal.
Powell reiterated that the US central bank is in no rush to cut rates but he also raised concerns regarding ease off in labour market and increase in deficits.
This week, traders will keep an eye on important data points like US retail sales, industrial production and a few housing numbers, which could provide clarity on overall economic health, Modi added.
On the overseas front, spot gold at Comex was traded at USD 2,436 per ounce, registering a gain of USD 28 per ounce from previous day.
According to Dilip Parmar, Research Analyst at HDFC Securities, gold prices traded higher amid ETF demand and speculative buying as the global gold prices hovering near the record high.
“...Decline in the treasury yields and US dollar index also supported the spot gold prices,” Parmar added.
Additionally, silver was also quoted higher at USD 30.77 per ounce. In the previous session, it had finished at USD 30.68 per ounce.
“Gold continues to trade positive, supported by a steady US dollar and easing bond yields as focus remains on an early rate cut by the Federal Reserve.
“The bullion was also supported by a rise in safe-haven demand amid signs of political uncertainty in the US and France, and with a close eye on the geo-political developments in the middle-east as well,” Pranav Mer, VP - Research (Commodity & Currency) at BlinkX and JM Financial, said.
