Gold and Silver: Amid the strengthening trend in global markets, the price of silver in the national capital on Wednesday jumped by Rs 4,000 to Rs 2.68 lakh per kg. At the same time, gold also increased and crossed the level of Rs 1.61 lakh per 10 grams. According to All India Bullion Association, silver rose by Rs 4,000, or about 1.5 percent, to Rs 2,68,500 per kg (including all taxes). Earlier on Tuesday, it had closed at Rs 2,64,500 per kg. Gold of 99.9 per cent purity also rose by Rs 600, or 0.4 per cent, to Rs 1,61,300 per 10 grams (including all taxes) on the support of buying. In the last session, it had closed at Rs 1,60,700 per 10 grams.
Support received from expectations of Fed rate cut
Saumil Gandhi, Senior Analyst (Commodities) at HDFC Securities said that expectations of more aggressive interest rate cuts by the Federal Reserve have supported gold and silver. He said America’s retail sales figures for December were weaker than expected, indicating a slowdown in consumer spending and raising concerns about economic growth. According to Gandhi, after these figures, the market is now predicting the possibility of Fed rate cuts three times this year, whereas till a week ago two cuts were expected. The low interest rate environment is considered favorable for non-interest bearing metals like gold.

Global market also booming
In the global market, spot silver increased by $ 4.71 or about 6 percent to reach $ 85.51 an ounce. Spot gold was seen trading 1.06 percent higher at $ 5,078.72 an ounce. Praveen Singh, Head of Commodities, Mirae Asset Sharekhan, said that gold is seeing a rise due to weakness in the US dollar and investor activity awaiting the US non-farm payroll data for January. After the release of these data, fluctuations in precious metals may increase in the international market.

impact of geopolitical tension
Saumil Gandhi said that geopolitical tensions have also boosted the demand for safe-haven. In the latest development, Washington is reportedly considering blocking tankers carrying Iranian crude oil and may also deploy additional naval forces if talks on Iran’s nuclear program fail. Due to these global factors, currently there is a strengthening trend in the prices of gold and silver.