Gold prices hit a record high, MCX precious metals' prices soar

Gold prices on the MCX Friday hovered at an intraday low of Rs 73,128 per 10 grams, hitting a record high with a rise of more than 1%. In the international market, prices are hovering around $2,568.25 per ounce.

The price of silver on the MCX also hovered at an intraday low of Rs 87,451 per kg on Friday. In the international market, the price hovered around $29.94 per ounce. Silver prices remained stable in the global market while they rose in the domestic market.

Manav Modi, Senior Analyst, Commodity Research, MOFSL, said, "Gold prices rose more than 1% to hit a record high, supported by expectations of an interest rate cut by the Federal Reserve next week after U.S. data showed a mixed batch of inflation and easing labour market."

The U.S. Labor Department said initial claims for state unemployment benefits rose 2,000 to a seasonally adjusted 230,000.

The U.S. producer prices increased slightly more than expected in August amid higher costs for services, but the trend remained consistent with subsiding inflation. US CPI wherein, the headline data was reported lower at 2.5% v/s 2.9% in the previous month. However, Core CPI was in-line with expectations slightly on higher side.

Similarly, US PPI was also reported slightly lower, while Core number on monthly basis was significantly higher.

"Markets are currently pricing in a 73% chance of a 25-basis-point U.S. rate cut at the Fed's Sept. 17-18 meeting, and a 27% chance of a 50-bps cut, the CME Fed-Watch tool showed. Even though 50 bps rate cut expectation fell, market participants are cheering the possibility of a first cut of 25bps by the Fed. ECB cut rates by 60bps to 3.65%, deposit rates were also cut by 25bps. Focus today will be on Michigan consumer sentiment data," said Modi.