Gold Surges ₹3,000 To ₹1.30 Lakh/10g Amid Firm Global Cues, Weak Dollar

Gold prices surged ₹3,000 to ₹1,30,900 per 10 grams in the national capital on Thursday tracking firm global cues and weak dollar, according to the All India Sarafa Association.

Traders said the end of US government's shutdown also supported the appeal of the safe-haven asset.

The precious metal of 99.5% purity extended its gains for the third straight day, jumping ₹3,000 to ₹1,30,300 per 10 grams (inclusive of all taxes) from Wednesday's closing of ₹1,27,300 per 10 grams.

In the local bullion market, gold of 99.9% purity had closed at ₹ 1,27,900 per 10 grams in the previous market session.

Silver prices skyrocketed ₹7,700 to ₹1,69,000 per kilogram (inclusive of all taxes) on Thursday. The white metal had settled at ₹1,61,300 per kg, up ₹5,540 on Wednesday.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.20% lower at 99.30, after the Trump administration passed the bill to end a 43-day record government shutdown, lending support to the bullion prices.

In the international markets, spot gold rose USD 41.19, or 0.98%, to USD 4,236.84 an ounce.

"Bullion extended its gains on Thursday, supported by a soft US dollar and growing expectations for more rate cuts following weaker macroeconomic data from the world's largest economy.

"Additionally, the Federal Reserve is likely to inject more money into the system to address a partial liquidity drain caused by the shutdown, which also impacted positively precious metals," Saumil Gandhi, Senior Analyst -- Commodities at HDFC Securities, said.

Spot silver was trading 1.13% higher at USD 53.86 per ounce in overseas trade.

"Silver has rebounded strongly this week, gaining more than 10% so far. This surge is driven by several bullish factors, including expectations for rate cuts, supply concerns, robust industrial and investment demand, and strong technical momentum," Gandhi added.

The US Department of the Interior added silver to its "critical minerals" list, and highlighted its importance to the economy and national security.

"The market is now awaiting a flurry of official data after the US government ends the longest shutdown in its history. The official data eliminates the market's dependence on private data, offering clarity about the US economy's health and dispelling uncertainty about future rate decisions," he said.

Sandip Raichura, CEO, Retail Broking & Distribution and Director at PL Capital, said global tensions have reduced and there could be more headwinds as US deals with India and other major nations that can cap bullion prices.