Precious metals rise due to drop in US dollar, with gold reaching Rs 1.58 lakh and silver experiencing a surge.

In Mumbai on Tuesday, there was a significant increase in the prices of gold and silver, reaching record highs. This was due to the ongoing weakness of the US dollar and the anticipation of rate cuts by the US Federal Reserve. In fact, the MCX gold February futures rose by 1.48% to Rs 1,58,343 per 10 grams, while the MCX silver March futures rose by 6.56% to Rs 3,56,670 per kg. At the start of the day, gold had even reached a peak of Rs 1,59,820 per 10 grams, showing a rise of 2.4%. However, eventually, the price level was brought down due to some profit-booking. This trend was also seen in the international markets, as tensions in various regions drove investors towards safe-haven assets. The renewed fears of a government shutdown in the US, coupled with President Donald Trump's threat of imposing tariffs on South Korean imports, only added fuel to the already tense trade situation. Trump also warned Canada of a 100% tariff if it decides to make a deal with China. The US gold futures for April also showed an increase of 1% to $5,113.70 per troy ounce, as the dollar index eased by 0.1%. This made bullion more affordable in overseas currencies. The demand for safe-haven assets, along with steady central-bank accumulation and expectations of accommodating global monetary conditions, have been the driving forces behind the rise in prices. COMEX Silver has crossed the $99 mark, reaching new all-time highs. Meanwhile, the two-day Federal Open Market Committee meeting in the US this week is expected to maintain interest rates at their current level. However, traders believe that there may be at least two rate cuts later in the year. Rahul Kalantri, the VP of Commodities at Mehta Equities Ltd, stated that the focus of the market has now shifted towards the upcoming Federal Reserve decision. However, the speculation surrounding political pressure on the central bank continues to dominate discussions. These developments have led to a strong inflow of investments into silver and other precious metals. Kalantri also added that gold has support at Rs 1,57,050 to Rs 1,55,310, while resistance is at Rs 1,59,850 and Rs 1,62,950. On the other hand, silver has support at Rs 3,38,810 and Rs 3,22,170, with resistance at Rs 3,55,810 and Rs 3,62,470. According to another analyst, there is a high chance that gold will reach Rs 1,65,000 per 10 grams and silver will touch Rs 3,65,000 per kg in the upcoming sessions. The sharp rise of silver from Rs 60,000 to Rs 3,20,000 could lead to a period of consolidation at the current high levels or even a rebalancing by market participants, as stated in a recent report.