Gold breaches Rs 1.21 lakh per 10g on US govt shutdown, Fed rate cut bets

Gold prices rallied by Rs 1,100 to breach the Rs 1.21 lakh per 10-g mark in the national capital on Wednesday, tracking firm global cues amid the US government shutdown after Congress failed to approve fresh federal funding.

According to All India Sarafa Association, the precious metal of 99.9 per cent purity jumped Rs 1,100 to hit a fresh peak of Rs 1,21,100 per 10g (inclusive of all taxes). It had closed at Rs 1,20,000 per 10g on Tuesday.

In the local bullion market, gold of 99.5 per cent purity appreciated by Rs 1,100 to hit a lifetime high of Rs 1,20,500 per 10g (inclusive of all taxes) on Wednesday. The yellow metal had settled at Rs 1,19,400 per 10g in the previous session.

However, silver prices remained flat at Rs 1,50,500 per kg (inclusive of all taxes), also at its record levels, as per the association.

Traders said a weakening labour market has reinforced expectations of imminent interest rate cuts by the Federal Reserve, further lending support to the bullion prices.

In the overseas markets, spot gold rose more than 1 per cent to hit a record high of USD 3,895.33 per ounce, while spot silver increased by nearly 2 per cent to hit a high of USD 47.56 per ounce.