Blitz Bureau
NEW DELHI: The price of gold reached a record high on September 30, on track for its largest monthly surge in 14 years amid concerns over a potential US government shutdown and rising expectations for further Federal Reserve rate cuts. The price of yellow metal has risen 11.4 per cent so far in September, on track for its best month since August 2011 when it rose 15 per cent boosted by safe haven demand.
The price of 24-carat gold (10 gram) rose to a new high of Rs 1,15,450, according to data published by the India Bullion and Jewellers Association (IBJA). US gold futures for December delivery rose 0.4 per cent to $3,872. US President Donald Trump and his Democratic opponents appeared to make little progress at a White House meeting aimed at heading off a government shutdown that could disrupt a wide range of services as early as Wednesday.
The US Labour Department announced it will halt economic data releases, including the September jobs report, in the event of a partial government shutdown closing down its statistics agency. Recent economic data has bolstered expectations for additional easing by the Federal Reserve. Traders are pricing in an 89 per cent likelihood of a 25-basis-point cut at the upcoming Federal Reserve meeting, as reported by CME Group’s FedWatch tool.
St. Louis Federal Reserve President Alberto Musalem said he was open to further rate cuts but the Fed must be cautious and keep rates high enough to continue to lean against inflation. Gold has outperformed Indian equities for the fourth consecutive Diwali-to-Diwali cycle, continuing a trend where the yellow metal has outperformed equities in seven of the last eight years.
