Gold and Silver Surge as Wedding Festivities Fuel Demand, Prices Reclaim Key Levels

In the heart of India’s wedding season, gold prices surged by Rs 500 on Friday, reclaiming the Rs 80,000 mark per 10 grams, while silver followed suit with an impressive jump of Rs 800, now priced at Rs 94,600 per kilogram in the national capital. This rise comes as jewellers and retailers ramp up purchases to meet the seasonal demand, according to the All India Sarafa Association. The renewed buying activity signals a strong rebound for gold, which had dipped to Rs 79,500 just a day earlier.

Gold of 99.5 per cent purity also rose, climbing Rs 500 to Rs 79,600 per 10 grams. With local jewellers seizing the festive momentum, the demand for both metals has been buoyed by the rupee’s depreciation against the US dollar, attracting investors looking for a safe haven.

Gold Futures Slide Amid Strong Dollar, Rate Cut Outlook

In the futures market, however, gold contracts for December delivery slipped by Rs 198, trading at Rs 77,213 per 10 grams on the Multi Commodity Exchange (MCX). According to Jateen Trivedi, VP Research Analyst of Commodity and Currency at LKP Securities, gold traded weak as the dollar index strengthened following the US Federal Reserve’s recent policy announcement. The Fed confirmed a 0.25% interest rate cut, which met market expectations, leaving limited catalysts for a further rally in gold.

Trivedi also pointed out that the Fed’s commitment to stabilizing inflation around 2% had no surprises, dampening gold’s immediate appeal. “Profit-booking continued after Trump’s election victory,” Trivedi remarked, suggesting that traders were capitalizing on recent gains in the metal.

Silver and Gold Dip in Global Markets Amid Strong Dollar

Globally, gold and silver prices faced downward pressure in the Asian trading hours. Comex gold futures dropped USD 10 to USD 2,695.70 per ounce, and silver declined 0.80% to USD 31.60 per ounce. Market analysts attribute this dip to a stronger dollar, driven by optimism around potential economic growth under President-elect Donald Trump. His policies, including tax cuts and higher tariffs, are expected to stimulate growth, creating conditions for inflationary pressures that could impact Fed policy.

Outlook: Rising Demand Could Keep Gold Shining

As wedding demand continues to heat up, traders are optimistic about the outlook for gold. Abans Holdings CEO Chintan Mehta commented that while potential delays in further interest rate cuts could momentarily pull prices down, these dips may provide a ripe opportunity for investors to accumulate gold. Mehta believes that gold prices are poised to climb higher, with strong seasonal demand and currency factors adding to its allure.

As India’s wedding festivities sweep across the country, both gold and silver are set to remain in the spotlight, reflecting not only cultural traditions but also economic trends. For those watching the market, the message is clear: while fluctuations may arise, gold’s appeal endures, ready to shine as both a cherished tradition and a sound investment.