Investors were back to seeking traditional safe-haven assets like gold, making the yellow metal’s prices jump ₹600 to ₹1,00,770 per 10 grams in the national capital on Tuesday, according to the All India Sarafa Association.
The precious metal of 99.9 per cent purity had closed at ₹1,00,170 per 10 grams on Monday.
Gold of 99.5 per cent purity, meanwhile, climbed ₹500 to ₹1,00,400 per 10 grams (inclusive of all taxes) from the last close of ₹99,900 per 10 grams.
Silver prices also rallied by ₹3,000 to revisit the all-time high level of ₹1,18,000 per kg (inclusive of all taxes). The white metal had finished at ₹1,15,000 per kg on Monday, according to the Sarafa Association.
Also Read: Gold falls ₹500; still above ₹1 lakh/10 g
"Gold prices rose on Tuesday as investors sought traditional safe-haven assets after the US President Donald Trump's decision to remove Federal Reserve Governor Lisa Cook, which raised concerns about the independence of the central bank," Saumil Gandhi, Senior Analyst - Commodities at HDFC Securities, said.
Further, President Trump's action exerted additional pressure on the Fed's leadership to lower interest rates soon, a move that typically benefits non-yielding gold, Gandhi added.
The rupee depreciated by 12 paise to close at 87.68 (provisional) against the US dollar on Tuesday, tracking weak domestic markets after the US issued a draft notice on plans to implement an additional 25 per cent tariff on Indian products.
Globally, spot gold is trading 0.37 per cent higher at USD 3,378.37 per ounce in New York.
"Spot gold surged, buoyed by renewed dollar weakness amid concerns over the US central bank's independence after President Trump dismissed Fed Governor Lisa Cook," Kaynat Chainwala, AVP Commodity Research, Kotak Securities, said.
However, spot silver fell 0.21 per cent to trade at USD 38.48 per ounce.
"Uncertainty around tariffs is adding another layer of support. Trump's move to impose an additional 25 per cent tariffs on India starting on August 27, coupled with escalating tensions in the Russia-Ukraine war, has left traders sceptical about any meaningful progress in peace talks," Chintan Mehta, CEO, Abans Financial Services, said.
Meanwhile, central banks, particularly in China and Turkey, are continuing to build their gold reserves, providing additional momentum. Investors will focus on key US macroeconomic data releases, including jobless claims and GDP revisions, to gauge the Fed's next steps for the interest rate cycle, Mehta added.
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