Gold Jumps Near Record High on Rupee Weakness

New Delhi, Sep 5 (PTI) Gold prices jumped by Rs 900 to Rs 1,06,970 per 10 grams in the national capital on Friday, inching closer to record high levels on fresh buying by stockists and firm global trends.

Traders said the rally was growing amid conviction that the Federal Reserve may opt for an interest rate cut at its upcoming policy meeting on September 16-17.

According to the All India Sarafa Association, gold of 99.5 per cent purity also advanced by Rs 900 to Rs 1,06,100 per 10 grams (inclusive of all taxes) on Friday, from the previous close of Rs 1,05,200 per 10 grams.

Silver prices remained flat at Rs 1,25,600 per kg (inclusive of all taxes) on Friday, as per the Association.

"Gold rose on the last trading day of the week, fuelled by expectations of lower US interest rates and safe-haven demand. Following Thursday's disappointing employment report, markets fully priced in a September rate cut.

"Pessimism regarding the peace deal between Russia and Ukraine, due to a lack of progress, has also heightened demand for safe-haven asset," said Saumil Gandhi, Senior Analyst - Commodities at HDFC Securities.

On Friday, the rupee declined 15 paise to close at an all-time low of Rs 88.27 against the US dollar amid sustained outflow of foreign funds and fear of additional US tariffs against India.

In the international markets, spot gold edged higher to USD 3,551.44 per ounce, remaining close to its record high of USD 3,578.80 per ounce on Wednesday. Spot silver rose by 0.22 per cent to trade at USD 40.76 per ounce.

"The US nonfarm payroll report to be released later in the day ... is a crucial report as it will throw more light on the status of US job market which in turn will shape the Federal Reserve's monetary policy decision," Praveen Singh Head of Commodities and Currencies Mirae Asset ShareKhan, said.

The Fed is now focusing more on job market rather than inflation control, a weak report will boost successive rate cut odds, Singh added.