Gold and Silver Prices Surge Amid Chinese Central Bank Buying

Precious metals experienced a global rally on Monday, with gold reaching a nine-week peak. Spot gold rose 0.8% to $4,376.56 per ounce, while spot silver climbed 3.1% to $65.50 per ounce. The People's Bank of China drove much of this momentum after recording its largest addition to gold reserves since October 2023 during the month of July.

In India, the Multi Commodity Exchange recorded similar gains of over 1 per cent for both metals. Silver outperformed gold on the exchange, hitting an intraday high of Rs 2,35,221, a 1.62 per cent increase. Gold futures for October delivery rose 0.76 per cent to reach Rs 1,52,982. Analysts attributed the domestic surge to strong global cues and rising demand for jewelry and investment ahead of the festive season.

Investors are now focusing on upcoming United States economic data, specifically the consumer price index and producer price index. Market participants are using this data to anticipate policy decisions from the Federal Reserve System. While economists expect July CPI to rise 3.4% year-on-year, traders are currently pricing in an 81% chance of a rate hike in December and a 52% chance in September.