Silver also followed the suit and surged Rs 1,000 to Rs 93,500 per kg due to fresh buying from from industrial units and coin makers. On Tuesday, it had finished at Rs 92,500 per kg.
Meanwhile, gold of 99.5 per cent purity jumped Rs 250 to hit a fresh record high of Rs 78,500 per 10 grams against the previous close of Rs 78,250 per 10 grams.
Traders attributed the rise in gold prices due to strong demand by local jewellers. Besides, the decline in equity markets also aided the rally in the yellow metal as investors moved towards the safe haven assets like gold.
In futures trade on the Multi Commodity Exchange (MCX), gold contracts for December delivery climbed Rs 268 or 0.35 per cent to Rs 76,628 per 10 grams.
Silver contracts for December delivery zoomed by Rs 580 or 0.63 per cent to Rs 92,203 per kg on the exchange. “Gold prices stayed elevated with gains in MCX, while Comex gold traded above USD 2,675. Traders continue to position themselves on expectations that the Federal Reserve will maintain its path of interest rate cuts,” Jateen Trivedi, VP Research Analyst – Commodity and Currency at LKP Securities, said. This has sustained bullish sentiment around the yellow metal, which reached record highs in September. Since then, gold has been consolidating in the low-to-mid USD 2,600 per ounce range, as traders anticipate a slower pace of interest rate cuts from the Fed, Trivedi added.
In the international markets, Comex gold futures rose 0.51 per cent to USD 2,692.50 per ounce.
“Mixed comments from a slew of US Federal Reserve officials is keeping market participants on edge.
Governor Christopher Waller said he supported a cautious stance towards reducing rates further in the coming months, citing recent signs of resilience in the US economy and sticky inflation,” Manav Modi, Senior Analyst, Commodity Research at Motilal Oswal Financial Services Ltd, said.
According to commodity experts, lower expected interest rates are bullish for gold prices as they reduce the opportunity cost of holding the non-interest paying asset.
The yellow metal remains strongly supported by elevated geopolitical tensions and uncertainty surrounding nearing the US Presidential elections.
The Fed officials are divided on the number of rate cuts until the end of the year, the US Fed remains on track for more policy easing, with markets awaiting coming economic data from the central bank to get clear picture about its rate cut trajectory, they added.
Silver quoted 0.91 per cent higher at USD 32.05 per ounce in the Asian market hours.
Focus this week will be on US Retail Sales, Industrial Production (IIP) and China GDP data which will provide insights on the trajectory of the bullion prices in the near future, Modi added.