Gold & Silver Prices Surge After Fed Rate Cut
Gold and silver prices have taken a significant leap following the recent decision by the US Federal Reserve to cut interest rates. On December 11, gold prices surged over 0.6%, reaching ₹1,30,575 per 10 grams, while silver hit a record high of ₹1,93,300 per kg. This surge is in line with historical trends where lower interest rates make gold a more appealing investment choice.
The Federal Open Market Committee (FOMC) reduced the benchmark interest rate by 25 basis points for the third consecutive time, bringing it down to the range of 3.50%–3.75%. This reduction has led to increased investor interest in gold and silver, both of which are considered safe-haven assets during times of economic uncertainty.
Market analysts point out that gold tends to perform well in low-interest-rate environments since it does not yield interest like other investment options. The recent data suggests a growing demand for precious metals as investors seek to hedge against inflation and currency fluctuations.
Ross Maxwell, a Global Strategy Operations Lead at VT Markets, emphasizes that a weaker dollar, combined with lower interest rates, enhances the attractiveness of gold and silver. “A softer dollar reduces the opportunity cost of holding non-yielding assets, leading to increased demand for these precious metals,” he stated.
Experts also highlight key support and resistance levels for both gold and silver. Manoj Kumar Jain from Prithvifinmart Commodity Research indicates that gold has support at $4,200 and $4,164, with resistance at $4,258 and $4,300 per troy ounce. For silver, support is noted at $60.40 and $59.80, while resistance is at $62.20 and $63.50.
In the Indian market, gold is expected to find support at ₹1,29,100 and ₹1,28,500, with resistance levels at ₹1,30,660 and ₹1,31,200. Silver's support is at ₹1,86,500 and ₹1,84,000, while resistance is anticipated at ₹1,92,000 and ₹1,94,000.
Looking ahead, market participants are keenly awaiting the upcoming US job and CPI inflation data, which could significantly influence Fed interest rate expectations and, consequently, the prices of gold and silver. Many analysts maintain a bullish outlook on these metals, suggesting that gold may target ₹1,35,000 and silver ₹2,00,000 in the short term.
As the market remains volatile, investors are encouraged to stay informed and consult with financial experts before making any investment decisions. The precious metals market is sensitive to changes in economic conditions, making careful analysis essential.
