Gold Prices Rallies To Hit New Record In Bangalore On September 16, Silver Jumps; How Fed Policy Will Impact?

Gold prices continue to shine in Bangalore, extending their record-high rally on Monday, September 16, 2024. 24K gold price in 10 grams rises to hit a new lifetime high of Rs 75,050, while 22K and 18K prices follow suit to touch new all-time highs of Rs 68,800 and Rs 56,290 respectively. Similarly, silver prices also witnessed significant upside. The key influencer for record gold prices is the optimism of either 25 bps or 50 bps rate cut by the Federal Reserve on September 18.

Gold Prices In Bangalore On September 16, 2024: 24K gold prices surged by Rs 1,600 to Rs 7,50,000 per 100 grams, followed by gains of Rs 160 in 10 grams to Rs 75,050. Also, 8 grams and 1 gram are up by Rs 128 and Rs 16 to Rs 60,040 and Rs 7,505 respectively.

Meanwhile, 22K gold prices in 100 grams climbed by Rs 1,500 to Rs 6,88,000 on Monday, while 10 grams of yellow metal is available at Rs 68,800 up by Rs 150. Additionally, 8 grams of gold is up by Rs 120 to Rs 55,040, and 1 gram price is up by Rs 15 to Rs 6,880.

Also, 18K gold price surged sharply by Rs 1,200 to Rs 5,62,800 in 100 grams, followed by Rs 120 upside in 10 grams to Rs 56,290, while 8 grams of gold edged higher by Rs 96 to Rs 45,032, and 1 gram is up by Rs 12 to Rs 5,629.

Silver Prices In Bangalore On September 16: 1 Kg silver jumped by Rs 1,000 to Rs 86,000, while the 100 grams price is up by Rs 100 to Rs 8,500. Also, 10 grams is up by Rs 10 to Rs 860. Further, 8 grams and 1 gram of silver are up by Rs 8 and Rs 1 to Rs 688 and Rs 86 respectively.

Rahul Kalantri, VP of Commodities, Mehta Equities said, "In a historic week for the precious metals market, gold futures have broken records, surpassing the $2,600 per troy ounce mark for the first time. Silver also recorded solid gains, driven by substantial interest rate cuts from the ECB and a weakening dollar index. Attention now turns to the Federal Reserve, with mounting speculation regarding the magnitude of its interest rate cuts and the pace of further reductions at the upcoming monetary policy meeting."

The FOMC chaired by Jerome Powell will commence their 2-day monetary policy meeting on September 17, with outcomes to be announced on September 18. The CME FedWatch signalled that interest rate traders are currently pricing in a 60 per cent probability of a 50 basis point cut on Wednesday while top economists more or less expect a 25 basis point reduction from its current fed funds rate of 5.25-5.50 per cent.

How Will Fed Policy Impact Precious Metals?

Prithviraj Kothari, Managing Director of RiddiSiddhi Bullions Limited(RSBL) said, the US Federal Reserve is expected to cut interest rates by 50 basis points next week, causing gold prices to reach fresh highs above $2550. Sentiment is optimistic after the US Labor Department reported that initial jobless claims climbed as predicted, above the previous week's number.

Following the report, Kothari said, "The US Dollar Index, which measures the dollar's performance versus its rivals, fell to a daily low of 100.5. We are going for a reduced interest rate environment; thus, gold is becoming more appealing. We believe we might have far more frequent cutbacks as opposed to a larger size."

Also, precious metal prices surged during the occasion of Milad-un-Nabi or Id-e Milad (Birthday of Prophet Mohammad) (bara vafat).