|
The Indian precious metals market experienced a significant surge on Wednesday, with gold prices reclaiming the ₹80,000 mark per 10 grams and silver prices also witnessing a substantial rally. This upward trend was driven primarily by increased buying from jewellers and stockists, according to the All India Sarafa Association. The price of 99.9 per cent purity gold increased by ₹300, reaching approximately ₹80,000, a near one-month high. Similarly, 99.5 per cent purity gold saw a ₹300 increase, settling at ₹79,600 per 10 grams. This marks a substantial increase from the previous day's closing prices of ₹79,700 and ₹79,300 respectively. The consistent rise in demand from local markets is a key factor driving these increases.
The upward momentum wasn't limited to gold. Silver prices extended their winning streak for a third consecutive day, jumping by ₹500 to reach a near one-month high of ₹92,500 per kg. This is a significant increase from Tuesday's closing price of ₹92,000 per kg. The concurrent rise in both gold and silver prices points to a broader market trend, indicating strong investor and consumer confidence in these precious metals as safe-haven assets.
The futures market also reflected this positive trend. On the Multi Commodity Exchange (MCX), gold contracts for February delivery saw an appreciation of ₹43, reaching ₹77,574 per 10 grams. Silver contracts for March delivery increased by ₹224 (0.25 per cent), reaching ₹91,097 per kg. These figures highlight the positive sentiment surrounding precious metals not only in the spot market but also in the derivatives market, indicating anticipation of further price increases.
However, the international market presented a slightly contrasting picture. Comex gold futures experienced a slight dip of 0.09 per cent, settling at USD 2,663.10 per ounce. This divergence between domestic and international markets suggests that factors specific to the Indian market, such as robust domestic demand, are significantly influencing the price movement in India. Analysts attribute the rise in gold prices, at least partly, to strong demand from China, a leading global consumer of gold. Official figures revealed that China increased its gold reserves for the second consecutive month in December, which is viewed as a bullish signal for the precious metal.
Saumil Gandhi, Senior Analyst of Commodities at HDFC Securities, highlighted China's continued gold purchases as a key factor driving the price increase. He suggested that China's actions reflect a strategy to diversify its reserves, particularly in the context of Donald Trump's return to the White House. This interpretation underscores the geopolitical factors influencing investment decisions in precious metals, with gold often seen as a safe haven during times of political uncertainty. Similarly, Comex silver futures were quoted higher in Asian market hours at USD 30.71 per ounce, indicating a degree of global optimism.
Further analysis points to the potential influence of upcoming economic data releases on the price trajectory of precious metals. Renisha Chainani, Head of Research at Augmont, noted that the upcoming US non-farm payrolls report on Friday could significantly impact market sentiment. She suggests that softer-than-expected US economic statistics this week could lead to gains if investors become more confident in the Federal Reserve's projected interest rate cuts by 2025. This highlights the intricate interplay between macroeconomic factors and the precious metals market.
Finally, the Indian government revised its gold import figures downwards. The commerce ministry adjusted the November gold import numbers by USD 5 billion, to USD 9.84 billion, according to the Directorate General of Commercial Intelligence and Statistics (DGCIS). This revision contrasts with the previously reported record high of USD 14.86 billion, representing a significant four-fold increase. The discrepancy underscores the challenges in accurately tracking and reporting such high-value imports, highlighting the need for more robust data collection and analysis methods in the future. The fluctuations in both domestic and international gold prices, coupled with the evolving macroeconomic landscape, suggest that the precious metals market remains dynamic and highly responsive to both domestic and international factors.