Gold and silver prices rose on Wednesday, driven by strong demand in the spot market and increasing expectations of a US Federal Reserve rate cut next month. Both metals saw gains exceeding half a percent in early trading and maintained their strength throughout the day.
On November 26, both gold and silver extended their gains on the MCX, following a previous day’s increase of over 1%. By 9:10 am, MCX gold December futures were up by 0.50% at Rs 1,25,835 per 10 grams, while MCX silver December futures had gained 0.91% to reach Rs 1,57,750 per kg.
Subsequently, at around 1:30 pm, gold was trading at Rs 1,25,953 per 10 grams, marking a 0.58% increase, and silver at Rs 1,58,222 per kg, reflecting a rise of 1.22%.
Recent weak US economic data further fueled expectations of an imminent rate cut by the Federal Reserve. September’s retail sales only grew by 0.2%, below expectations and a decline from the previous month’s 0.6% rise. Additionally, the Producer Price Index (PPI) matched market forecasts with a 0.3% increase.
The delayed publication of these reports was due to a 43-day government shutdown in the US, which impacted the timing of several economic releases. The subdued retail sales figures and steady producer inflation have bolstered market projections of a 25 basis-point rate reduction to over 80%.
While the prospect of lower interest rates is boosting gold prices, progress in the Russia-Ukraine conflict may limit further upside for the precious metal. President Donald Trump’s announcement of missions to Moscow and Kyiv to advance a peace plan has generated optimism regarding resolving the prolonged conflict.
Rahul Kalantri, VP Commodities at Mehta Equities Ltd, highlighted that gold and silver closed near a two-week high driven by delayed US economic data, which heightened expectations of a December rate cut by the Fed. He provided key support and resistance levels for both metals in global and Indian markets, emphasizing the influence of global economic indicators, currency fluctuations, and geopolitical events on gold and silver prices in the near future.