Gold, Silver Prices Surge To Fresh Record Highs, Outshines Equities – Can Nifty 50 Catch Up?

Gold and Silver prices have touched their new all-time highs on September 29 amid a weakening US dollar, and rising bets on further rate cuts by the US Federal Reserve. The American central bank, during its last meeting on September 17, had cut rates by 25 basis points (bps).

The US dollar index, which measures the greenback against six major currencies, fell for the previous three consecutive sessions, losing over 0.60 per cent to quote at 97.62 today, as of 1:00 PM.

The CME FedWatch Tool shows market expects a 90 per cent chance of a rate cut in October and a 65 per cent chance of another cut in December.

Further, tariff hikes, the Russia-Ukraine conflict, tensions between the US and China, and several other factors such as central bank buying and a depreciating rupee in India have been further supporting Gold prices.

Gold, Silver Price Today

December gold futures on the Multi Commodity Exchange (MCX) climbed as much as 1 per cent to hit a new all-time high of Rs 1,16,050 per 10 grams. On COMEX, December Gold futures, too, touched a new record high. During the session so far, the contract surged as much as 0.99 per cent to $3,846.70 per ounce.

December Silver futures on MCX advanced up to 1.61 per cent to its record high of Rs 1,44,179 per 1 kg. On COMEX, December Silver futures jumped as much as 1.58 per cent to its lifetime high of $47.39 per ounce.

Gold, Silver Outperforms Nifty 50

According to Investing.com, COMEX gold has rallied more than 45 per cent year-to-date (YTD), while silver has delivered even higher, 62 per cent, return. Meanwhile, the Nifty 50, which represents the combined performance of India’s 50 largest and most liquid stocks across sectors, has managed a modest gain of just 3.83 per cent over the same time frame.

Will Gold Continue To Outperform Equities?

In the past, gold and silver have usually outperformed equities in times of uncertainty. Between 2008 and 2013, gold beat the Nifty 50, but after that, stocks bounced back and led the gains.

As of now, tariff deal uncertainty with US, various geopolitical conflicts, continued foreign institutional investor (FII) selling amid high valuations are weighing on Indian equities. If these issues stabilise, the Nifty 50 could see a revival.