NEW DELHI — On Monday, gold and silver prices went in different directions. In the physical markets in the national capital, prices fell from record highs, but in the futures market, prices rose sharply to reach new all-time highs.
The All India Sarafa Association says that gold with 99.9% purity in Delhi dipped by Rs 200 to Rs 1,07,670 per 10 grams. Gold with 99.5% purity also fell by Rs 200 to Rs 1,06,800 per 10 grams. This drop comes after a huge rise on Saturday, when gold of both purities hit record highs of Rs 1,07,870 and Rs 1,07,000 per 10 grams, respectively.
Silver also fell, dropping Rs 1,000 to Rs 1,26,000 per kg after reaching a career high of Rs 1,27,000 per kg on Saturday.
But the mood in the futures market was very different. Gold futures for delivery in October rose by Rs 447, or 0.41%, on the Multi-Commodity Exchange (MCX) to a new high of Rs 1,08,175 per 10 kilos. The December contract also went up a lot, by Rs 370, or 0.34%, to more over Rs 1.09 lakh.
Analysts said that a number of important variables caused the rapid spike in the futures market. Saumil Gandhi, a senior analyst for commodities at HDFC Securities, said that gold “remains in the bull’s control” because of safe-haven demand, hopes of a U.S. Federal Reserve rate cut, and a solid US currency.
On the MCX, silver futures also had a big recovery. The December contract rose by Rs 1,703, or 1.36%, to reach an all-time high of Rs 1,26,400 per kilogram. Renisha Chainani, Head of Research at Augmont, said that silver prices are going up because there isn’t enough of it on the market. This is because demand from industries like solar, electric vehicles, and electronics is expanding but supply is still limited.
The prices of precious metals around the world also went up in a similar way. Spot gold was up $35.11, or 1%, to a new high of $3,621.92 per ounce. Comex gold futures for December delivery also reached a new high of $3,662 per ounce.
Riya Singh, a Research Analyst at Emkay Global Financial Services, said that the record-breaking gain was “underpinned by dovish Federal Reserve expectations and a string of weak U.S. labor market data.” The valuable metal has already gone up more than 4% in the first week of September, and its gains for the year so far have been more than 36%. Singh also said that rising geopolitical tensions, especially between Russia and Ukraine, have made safe-haven movements even stronger.
Investors are eagerly waiting for the next U.S. inflation reports (the Producer Price Index and the Consumer Price Index) because they could give further information about the Federal Reserve’s decisions about monetary policy and could affect whether the price of gold continues to rise.