There is a continuous rise in gold prices this year. The yellow metal has advanced almost every month since January and is now on track for its strongest annual performance since 1979. On Monday, the gold contract for delivery on February 5 on MCX registered a rise of more than Rs 700. In the last trading session, gold had closed at Rs 1,27,667 per 10 grams, whereas today it opened at Rs 1,28,352. At around 11:42 am, gold was trading at Rs 1,28,380 per 10 grams with a rise of Rs 713.
Gold rising on expectations of Fed’s interest rates
The possibility of the Federal Reserve reducing interest rates in the US in December has given strong support to gold. According to a Bloomberg report, due to the government shutdown in America and the timely release of economic data, uncertainty has increased further, which is directly benefiting gold, which is considered a safe investment. In the international market on Friday, gold reached the level of around $ 4,170 per ounce. It saw an increase of more than 2% in just one week. When interest rates fall, investment in non-interest bearing assets like gold increases.
Why is the strength of gold continuously increasing?
Gold did come down slightly from its record level in November, but still it remains above $ 4,000 an ounce. For the last three weeks, there has been a continuous inflow in gold ETFs, which shows the confidence of investors. Along with this, central banks around the world are also very aggressive in purchasing gold. In the third quarter, central banks bought a total of 220 tonnes of gold, which is about 10% more than last year.
Silver also shines, price jumps 1.17%
Along with gold, the price of silver also registered a good rise on Monday. On MCX, silver for delivery on March 5 was trading at Rs 1,67,931 per kg with a rise of Rs 1,944 till 12:10 pm. The previous closing price was Rs 1,65,987. Today silver opened at Rs 1,67,190 and in early trading made a low of Rs 1,66,980 and a high of Rs 1,68,553. The continuous strength of both gold and silver shows that investors are preferring safe investments amid uncertainty in the global environment.
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