In a significant surge, gold prices in the national capital witnessed a sharp increase of Rs 1,100 on Friday, propelled by a strong rally in international markets. The precious metal's price reached Rs 1,41,500 for ten grams, marking a notable uptick for investors and consumers.
Sharp Rally in Precious Metals
The trading session on May 17 saw a dramatic rise in the bullion market. According to data from HDFC Securities, the price of 24-carat gold escalated by Rs 1,100, closing at Rs 1,41,500 per 10 grams. This followed the previous day's closing price of Rs 1,40,400. In parallel, silver also experienced a substantial jump, with prices climbing by Rs 1,400 to reach Rs 86,100 per kilogram, up from Thursday's finish of Rs 84,700.
The primary driver behind this domestic surge was a firm trend in global markets. In international trade, spot gold on the COMEX (Commodity Exchange Inc.) was quoted higher at $2,394 per ounce. Similarly, silver prices strengthened to $29.75 per ounce.
Global Cues and Market Sentiment
Analysts pointed to specific international factors that fueled the rally. Saumil Gandhi, a Senior Analyst for Commodities at HDFC Securities, attributed the rise to softer-than-expected US inflation data released earlier in the week. This data has reinforced market expectations that the US Federal Reserve might consider cutting interest rates in the latter part of the year.
Lower interest rates in the United States typically weaken the US dollar and reduce the opportunity cost of holding non-yielding assets like gold, making bullion more attractive to investors. This shift in macroeconomic expectations created a bullish environment for precious metals globally, with the momentum directly impacting Indian markets.
Implications for the Domestic Market
The sharp single-day increase of Rs 1,100 brings gold prices closer to recent peak levels. This movement is significant for a range of market participants, from individual buyers and jewellers to large-scale investors. The simultaneous rise in silver prices indicates broad-based strength in the precious metals complex.
Market observers suggest that the trajectory of gold prices will continue to be heavily influenced by global factors, including upcoming US economic data and the evolving stance of major central banks. The current price point of Rs 1,41,500 per 10 grams in Delhi reflects the immediate impact of these international cues on local demand and pricing structures.
For consumers and traders, this volatility underscores the importance of monitoring global economic indicators. The interplay between US monetary policy, dollar strength, and geopolitical factors remains a key determinant for the future direction of gold and silver prices in India.
