Mumbai– Gold prices remained near record highs on Wednesday, supported by rising concerns over a potential U.S. government shutdown and mounting expectations of further Federal Reserve interest rate cuts amid weak labor data.
According to the India Bullion and Jewellers Association (IBJA), the price of 24-carat gold hit Rs 1,15,350 per 10 grams on Wednesday, slightly below Tuesday’s closing of Rs 1,16,903. U.S. gold futures for December delivery gained 0.7 percent to $3,901.
Precious metals saw volatility earlier in the week, with gold and silver slipping from intraday highs as traders booked profits, before rebounding on increased hedging demand later in the session.
In September, gold surged 11.4 percent, marking its second-strongest monthly rally since August 2011. Analysts noted that political uncertainty in Washington continues to boost safe-haven demand, as investors hedge through bullion. A weaker dollar index, hovering near a one-week low, has also made dollar-priced gold more attractive to overseas buyers.
“Gold has support at $3,830 to $3,810, or Rs 1,15,800 to 1,15,180, while resistance is at $3,884 to 3,910, or Rs 1,16,950 to 1,17,300,” said Rahul Kalantri, VP Commodities at Mehta Equities Ltd. He added that silver support lies at $46.60 to $46.30, with resistance at $47.40 to $47.70.
Despite high prices, India’s gold and silver imports touched record levels in September, further supported by the rupee’s slide to historic lows.
Meanwhile, the U.S. Senate on Tuesday failed to pass legislation to extend government funding, bringing the country closer to a shutdown. President Donald Trump also threatened additional cuts to the federal workforce. A shutdown would delay the release of key economic data, including Friday’s non-farm payrolls report.
Weak U.S. labor data and marginal growth in job openings for August have strengthened market bets on further Fed easing. Traders are now pricing in a 97 percent chance of a 25-basis-point cut this month and a 76 percent chance of another in December.
Gold has also outperformed Indian equities for the fourth consecutive Diwali-to-Diwali cycle, continuing a trend where the metal has outshined stocks in seven of the last eight years. (Source: IANS)
