Gold zooms for sixth day in a row, rallies Rs 700 on buying support

New Delhi, Jul 18 (PTI) Gold price surged by Rs 700 to Rs 76,400 per 10 grams in the local market here on Thursday on fresh domestic demand as well as depreciation in rupee.

According to All India Sarafa Association, the yellow metal prices had closed at Rs 75,700 per 10 grams in the previous session.

Extending its gains for the sixth straight session, the precious metal jumped by Rs 700 to Rs 76,400 per 10 grams in the national capital. Meanwhile, gold of 99.5 per cent purity zoomed by Rs 750 to Rs 76,100 per 10 grams.

However, silver prices declined by Rs 400 to Rs 94,000 per kg from Rs 94,400 per kg in the previous session.

Gold prices rose on account of sustained buying by local jewellers, the association said, adding weakness in the rupee also aided the rally in the yellow metal.

The rupee depreciated by 6 paise to settle at its all-time low of 83.64 (provisional) against the US dollar on Thursday.

Commodity markets were closed on Wednesday on the occasion of Muharram.

In the overseas market, Comex gold was trading at USD 2,466.80 per ounce, up by USD 6.90 per ounce.

“Gold prices held steady after hitting a record peak earlier this week amid growing optimism for an interest-rate cut from the US Federal Reserve in September and a weaker dollar. However, this week market participants are expecting two rate cuts in 2024.

“Recent economic data points from the US, were slightly mixed supporting the rate cut potential this year, bets for rate cut in September has now shifted to 95 per cent and same for November is at 50 per cent,” Navneet Damani, Grp Sr. Vice President, Head Commodity & Currency Research at Motilal Oswal Financial Services Ltd, said.

Silver was also marginally up at USD 30.66 per ounce in New York.

“Gold traded positively on Thursday. This movement is driven by expectations of a Fed rate cut in September and the weakness of the dollar index. Additionally, traders are focusing on the upcoming budget next week, monitoring potential regulatory changes from the government,” Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities, said.

According to Kaynat Chainwala, AVP-Commodity Research at Kotak Securities, Comex gold surged to an all-time high of USD 2,388.4 per ounce on Wednesday as recent statements from Fed Chair and Federal Open Market Committee (FOMC) officials bolstered expectations of a rate cut in September while better-than-expected US retail sales figures, could not shift market expectations for a September rate cut.

Although, Comex gold retreated sharply from record highs amid profit booking. The bullion prices traded above USD 2,470 per ounce, as markets assess Fed pivot bets due to increasing signs that inflation is cooling toward the central bank’s target, Chainwala added.