Gold And Silver Gain On US Rate Cut Speculations

Chennai: Gold prices made the biggest daily gain on Tuesday since 2008 as the market speculated that the US Federal Reserve chair candidate Kevin Warsh was likely to further cut the interest rates.

Gold in the Multi Commodity Exchange gained 6.72 per cent from a low of Rs 1,47,215 per 10 gm to a high of Rs 1,53,460 per 10 gm. Silver surged 11.96 per cent from a low of Rs 2,45,711 per kg to Rs 2,70,398. In the Delhi spot market, gold gained Rs 5000 to move up to Rs 1,57,700 per 10 gm and silver rose by Rs 24,000 to Rs 2,84,000 per kg.

In the international market, spot gold surged 6.8 per cent from $4633 per ounce to $4949. Silver gained 11.1 per cent from $79.13 an ounce to $87.94.

“Gold prices surged, heading for their biggest daily gain since November 2008, as investors rushed to buy after one of the sharpest two-day selloffs in decades. While markets continue to assess Kevin Warsh’s nomination as the next Federal Reserve chair, expectations that the Fed could still cut interest rates in 2025 have limited the US dollar’s rebound from a four-year low, supporting bullion,” said Kedia Commodities.

The dollar faces further weakness in 2026 as the Federal Reserve looks set to cut interest rates again under Fed Chair nominee Kevin Warsh, MUFG Bank’s Lee Hardman was quoted by Wall Street Journal. Warsh is well respected by market participants and central bankers, which has dampened fears over threats to the Fed’s independence. The Fed is still likely to cut rates. Warsh has previously criticised the Fed for not lowering rates and is likely to emphasize that higher productivity growth allows the US economy to grow more without creating inflation pressures.

However, easing US-Iran tensions and the US-India trade deal have improved risk sentiment, potentially capping safe-haven demand. Adding to caution, CME Group’s decision to raise margin requirements on precious metals futures could trigger fresh volatility and weigh on gold in the near term. end