Gold prices on the Multi Commodity Exchange (MCX) reached an intraday low of ₹73,128 per 10 grams on Friday, marking a record high with a gain of over 1%. In the global market, gold prices hovered around $2,568.25 per ounce.
Silver prices on the MCX also saw an intraday low of ₹87,451 per kg, while in the international market, silver traded at approximately $29.94 per ounce. Although global silver prices remained stable, the domestic market witnessed an upward trend.
According to Manav Modi, Senior Analyst of Commodity Research at MOFSL, “Gold prices surged over 1% to a record high, driven by expectations of an interest rate cut by the Federal Reserve next week. This follows mixed U.S. economic data, which indicated easing inflation and a slowing labor market.”
The U.S. Labor Department reported an increase of 2,000 in initial state unemployment claims, bringing the seasonally adjusted total to 230,000. Meanwhile, producer prices in the U.S. rose slightly higher than expected in August due to increased service costs, although the overall trend pointed to easing inflation. The U.S. Consumer Price Index (CPI) showed a decline in headline inflation, reported at 2.5% compared to 2.9% in the previous month, while the Core CPI remained slightly elevated in line with expectations. Similarly, the Producer Price Index (PPI) also saw a marginal decline, though the core monthly figure was significantly higher.
Market sentiment remains optimistic, with traders currently pricing in a 73% probability of a 25-basis-point interest rate cut by the Federal Reserve at its September 17-18 meeting, while the likelihood of a 50-basis-point cut has dropped to 27%, according to the CME Fed-Watch tool. Despite the reduced expectations for a larger rate cut, market participants are encouraged by the possibility of a 25-basis-point reduction. Meanwhile, the European Central Bank (ECB) slashed interest rates by 60 basis points to 3.65%, with deposit rates lowered by 25 basis points. Investors are also closely monitoring the upcoming Michigan consumer sentiment data.
