Indian gold hit a fresh all-time high on Tuesday, tracking gains in overseas markets and a depreciation in the rupee currency, but the surge dampened demand in the world’s second biggest consumer of the precious metal, dealers said.
Domestic gold futures rose to Rs 57,099 ($699.19) per 10 grams, up nearly 4% so far in 2023. The yellow metal has been witnessing a one-sided rally since early November, after touching a 28-month low of $1,618 per troy ounce, on signs the Federal Reserve was turning less hawkish, spurring decline in the greenback and US treasury yields. Prospects of a looming slowdown in US, cooling inflation and Labour market coupled with a Fed pivot might continue to bolster gold prices.
In India, domestic prices have rallied nearly ₹7,000 in past four months, tracking a rebound in international rates. The Federal Reserve’s two-day meeting concludes on February 1, with most market participants expecting a 25-basis point hike. Lower rates reduce the opportunity cost of holding zero-yield bullion. On the other hand, a softer US dollar makes greenback-priced bullion attractive for buyers holding other currencies.
Traders are also monitoring the covid situation in top gold consumer China.