Gold prices surged in India on Tuesday, November 11, driven by strong global cues and robust local demand. The precious metal recorded nearly a 1% increase on the Multi Commodity Exchange (MCX), with silver also following the upward trend.
As of 10:15 am, MCX Gold December futures were up by 0.94% at Rs 1,25,131 per 10 grams, while MCX Silver December contracts climbed 1.16% to Rs 1,55,475 per kilogram.
By the close of the market session, gold maintained its strength at Rs 1,24,915 (a rise of 0.76%), and silver concluded at Rs 1,55,344 (an increase of 1.08%).
Market analysts attribute the bullish gold movement to mixed global sentiments, particularly regarding the potential resolution of the US government shutdown. Ross Maxwell, Global Strategy Lead at VT Markets, highlighted that despite expectations of a stronger USD and reduced safe-haven demand for gold with the end of uncertainty, gold prices reacted positively. This suggests market anticipation of sustained fiscal spending, escalating US debt levels, and a weaker USD in the medium term.
With India entering the peak wedding and festive season, which traditionally drives up bullion demand, domestic prices are also impacted by the performance of the Indian rupee. A weaker rupee could elevate the cost of imported gold.
Looking ahead, the short-term outlook remains optimistic, though cautious. Maxwell projected a potential price movement towards Rs 1,26,000 if the global rally persists and the rupee remains stable or weak. However, he cautioned about a probable correction scenario, where rising US yields and a strengthening dollar could drive prices down to around Rs 1,10,000, with strong support at approximately Rs 1,00,000 in case of a deeper correction.
Despite strong investor interest and festive season demand, excessively high prices may deter jewelry purchases. Maxwell emphasized that while festive demand and global sentiment are likely to exert moderate upward pressure, very high prices could impact buying patterns negatively, leading to a cautiously positive short-term outlook.