Gold soars past ₹1.18 lakh per 10 gram as rupee hits record low, global jitters fuel demand

Gold prices surged ₹2,700 to scale a new peak of ₹1,18,900 per 10 grams in the national capital amid sustained global demand for the safe-haven asset while rupee touched a new low facing the brunt of US H-1B visa fee hike.

According to the All India Sarafa Association, the yellow metal of 99.9% purity had closed at ₹1,16,200 per 10 grams in the previous market session.

In the local bullion market, gold of 99.5% purity rallied ₹2,650 to hit a record high of ₹1,18,300 per 10 grams (inclusive of all taxes). It had settled at ₹1,15,650 per 10 grams on Monday.

Traders said the rupee's steep fall against the US dollar added to the rally of the precious metal.

So far in this year, gold prices have added ₹39,950 per 10 grams, or 50.60%, rallying from ₹78,950 per 10 grams on December 31, 2024.

Silver prices also skyrocketed by ₹3,220 to hit an all-time high of ₹1,39,600 per kilogram (inclusive of all taxes) on Tuesday. The white metal had ended at ₹1,36,380 per kg in the previous session.

Silver prices have risen ₹49,900 per kilogram or 55.63% in the current calendar year, skyrocketing from ₹89,700 per kg on December 31, 2024.

On Tuesday, the rupee depreciated 47 paise to hit an all-time low of ₹88.75 against the US dollar, amid sustained outflow of foreign funds on the back of a steep hike in US H-1B visa fee that is expected to give a big blow to Indian IT services exports.

In the international markets, spot gold rose more than 1% to hit a record high of USD 3,791.10 per ounce.

Chainwala further stated that momentum in precious metal prices was already building from Friday, when exchange-traded funds added 8.61 lakh troy ounces of gold to holdings, the biggest one-day inflow since January 2022.

SPDR Gold Trust reported a 0.60% increase in holdings to 1,000.57 tonnes, the highest level in over three years, reinforcing bullish sentiment.

Last week, the Fed announced its first rate cut of the year and hinted that more to come as the labour market deteriorates. As a result, markets priced in nearly two additional 25 basis point cuts at the central bank's remaining meetings this year.

Spot silver was trading 0.57% higher at USD 44.32 per ounce.