Chennai: Gold prices made a new high on Wednesday in the domestic market after international prices touched a record high level on Tuesday on expectations of the US Federal Reserve going for an interest rate cut in September.
Gold prices in the Multi Commodity exchange made a new high of Rs 74,510 per 10 gms after the market opened in the evening on Wednesday against the previous close of Rs 74,273. The previous high of Rs 74,442 was made on May 20, said Ajay Kedia, MD, Kedia Commodities.
In the international market, gold prices on Tuesday surged to new record levels, driven by a confluence of economic factors that have bolstered demand for the precious metal. On Tuesday, gold prices reached $2465.29 an ounce, surpassing the previous high of $2450.10. This rally was led by rising expectations of an interest rate cut by the Federal Reserve in September, following softer inflation data in June and dovish comments from Fed Chair Jerome Powell.
Additionally, a weakening US dollar has further supported gold prices. The dollar fell to a five-week low before rebounding slightly on Tuesday, making gold cheaper for holders of other currencies and thus more attractive.
Meanwhile, silver prices opened low at Rs 93,500 per kg on Wednesday after closing at Rs 93,860 on Tuesday as the international rates were 0.75 per cent down on profit booking. It further went down to Rs 93,300 during the session. On Wednesday, gold prices in the international market remained flat.
The current economic landscape and market dynamics suggest that gold prices are poised to continue their upward trajectory. With the market sitting above the psychological $2400 level, the risks appear skewed to the upside. As a result, it is anticipated that Comex gold will soon target $2532 and beyond. This upward momentum is expected to extend to the MCX, potentially driving gold prices to Rs 75,200 and beyond, said Kedia.
