Gold and silver prices hit record highs amid geopolitical tensions, US election uncertainty and mixed economic data
Gold prices surged to unprecedented highs in the domestic futures market on October 21, 2024. The MCX Gold for the December 5 expiry reached a record Rs 78,299 per 10 grams, while MCX Silver for the same expiry climbed to Rs 97,893 per kg at 2.55 pm on October 21.
Silver also reached a new peak fueled by strong demand and its increasing industrial usage. Silver for March 5, 2025, expiry dipped to Rs 1,00,247 after hitting an all-time high of Rs 1,00,564 per kg earlier in the day.
In the international markets, spot gold prices soared to USD 2,725.81, marking a significant milestone reportedly, while silver approached a nearly 12-year peak.
Reasons Behind Price Surge
The recent price increases are largely attributed to escalating geopolitical tensions in West Asia and uncertainty surrounding the upcoming U.S. presidential election in 2024. A Reuters report had said that Israel is planning to attack sites linked to the financial operations of Lebanon's Hezbollah group and told people to leave those areas immediately.
Further, the fluctuations in the US Dollar Index also played a part. A weaker dollar generally makes gold and silver more affordable for investors holding other currencies. Live Mint cited an analyst saying positive economic data from China has also strengthened the case for precious metals, pushing the dollar index down from its near three-month highs. Chinese economic data that came out last week had ambitious indicators, limiting gains in the dollar index and bolstering the appeal of precious metals. Further supporting these trends, expectations of potential interest rate cuts from the U.S. Federal Reserve in November have emerged following mixed economic data recently released.
Also, investor sentiment is particularly influenced by the ongoing presidential election, which appears to be a tight race between former President Donald Trump and current Vice President Kamala Harris.