CHENNAI: Domestic gold futures rose to all-time high of Rs 69,487 per 10 grams on Monday on the back of possible rate cut from the US Federal Reserves and increased Chinese demand. Prices jumped 10% since January. Silver prices also jumped Rs 1,120 to Rs 78,570 per kilogram.
In Multi Commodity Exchange (MCX) futures trade, the June contract of gold climbed to Rs 68,679 per 10 grams and overseas spot COMEX climbed to $2,265.75 per ounce.
On the domestic front, 22 carat gold per 10 gram is priced at Rs 63,750 in Delhi and at Rs 64,550 in Chennai and Rs 63,600 in Bengaluru. India’s gold imports are set to plunge by more than 90% in March from the previous month to hit their lowest since the COVID pandemic, according to a Reuters report.
The US reported a moderated inflation data signalling a June interest rate reduction by the Federal Reserve. Monetary easing by the US Federal Reserves and other central banks, elevated conflict in Gaza and Ukraine, Chinese central bank adding up the gold reserves and increased appetite from young buyers in the country has contributed to the rally for the yellow metal.
“Further, major US data, including manufacturing Purchasing Managers Index (PMI) to be released on Monday which will provide further direction for the Federal Reserve’s monetary policy outlook,” said Praveen Singh, Associate VP at Sharekhan BNP Paribas.
Gold has long been considered a hedge against inflation and since 1971 it has outpaced the US and world consumer price indices (CPI), World Gold Council said in its report on Monday.
“Gold also protects investors against high inflation. In years when inflation was between 2%- 5%, gold’s price increased 8% per year on average. This number increased significantly with even higher inflation levels.” Gold has helped capital grow, it said.