The national capital, Delhi, witnessed a massive surge in the prices of gold and silver on Thursday, marking a significant shift in the precious metals market. Gold prices climbed to a three-month high, while silver saw a staggering jump of 10000 per kilogram. This sharp increase in domestic prices comes at a time when the US dollar has shown signs of weakness, prompting investors to turn their attention toward safe-haven assets like gold and silver. Despite the bullish trend in the local market, international markets told a different story, showing a decline in prices, which adds a layer of complexity to the current market dynamics. Experts suggest that the domestic surge is a direct consequence of global economic shifts and currency fluctuations that have made precious metals more attractive to local investors.
Gold Prices Reach Three-Month Peak in Delhi
In the national capital, gold prices experienced a substantial leap on Thursday, while the price of gold rose by 4300 to reach 162300 per 10 grams, a level not seen in the last three months. This surge has brought the precious metal back to its peak levels, driven largely by the weakening of the American dollar and a shift in investor sentiment. 9 percent purity was priced at 162300 per 10 grams, including all applicable taxes. This is a significant jump from Wednesday's closing price of 158000 per 10 grams. Historical data suggests that the precious metal was last seen around this level on May 26, when it was priced at 162400 per 10 grams. The sudden spike has caught many market participants by surprise, especially given the contrasting trends in the global bullion market.
Silver Prices Witness 10000 Jump
Silver followed a similar trajectory, showing an even more dramatic increase in its valuation. The price of silver jumped from 235000 per kilogram to 245000 per kilogram, including all taxes, marking a seven-week high. This white metal was last traded at these levels around July 3, when it also touched the 245000 per kilogram mark. The 10000 increase in a single day reflects the high volatility and the strong demand for silver among domestic investors. Analysts point out that the movement in silver often mirrors gold but with higher intensity, which was clearly visible in Thursday's trading session in Delhi.
Expert Analysis on Market Drivers
Saumil Gandhi, Senior Analyst (Commodities) at HDFC Securities, provided insights into the factors driving this rally. He noted that gold remained near its highest level in more than two months on Thursday due to a sharp decline in the US dollar and Treasury yields. According to Gandhi, the dollar index dropped to a three-month low, while the reduction in Treasury bond yields increased the demand for non-yielding assets like gold. He emphasized that this surge in spot bullion prices occurred despite the downward pressure seen in international markets. The weakening of the dollar makes gold cheaper for holders of other currencies, thereby boosting its appeal.
Contrasting Trends in International Markets
While the domestic market in Delhi was booming, international markets saw a decline in the prices of precious metals. 72 USD per ounce. 82 USD per ounce. Praveen Singh, Head of Commodities at Mirae Asset Sharekhan, explained that spot gold traded at lower levels around 4450 USD per ounce following geopolitical developments. He mentioned that crude oil prices rose by more than 2 percent after US President Donald Trump announced new economic sanctions on Iran, which influenced the global trading environment for commodities.
US Treasury Actions and Investor Sentiment
Gaurav Garg, Head of Research at Lemon Markets Desk, highlighted that gold remains near its highest level since early June, while this is attributed to the weakening of the dollar and the decrease in US Treasury yields after the US Treasury announced an increase in the buyback of long-term bonds. The US Treasury Department stated that it would at least double the volume of buybacks for off-the-run securities from 2 billion USD to 4 billion USD in the current August quarter. Praveen Singh added that investors viewed this move as a signal that the US Treasury would closely monitor the bond market, and the possibility of further actions can't be ruled out. This regulatory environment has created a supportive backdrop for precious metals, even as specific global events cause temporary fluctuations in spot prices.