Mumbai, Jan 27 (IANS) Gold and silver prices surged to record highs on Tuesday, amid persistent weakness in the US dollar and expectations of rate cuts by the US Federal Reserve.

MCX gold February futures rose 1.48 per cent to Rs 1,58,343 per 10 grams. Meanwhile, MCX silver March futures rose 6.56 per cent to Rs 3,56,670 per kg.

Earlier in the day, gold had peaked to Rs 1,59,820 per 10 grams, up 2.4 per cent, before profit-booking eased the price level.

International markets also saw gold and silver touching record highs, as geopolitical risks drove investors to safe-haven assets. Renewed fears of a government shutdown in the US and President Donald Trump's new threats of 25 per cent tariffs on South Korean automobiles, lumber, and pharmaceutical imports added fuel to trade tensions. Trump also warned Canada of a 100 per cent tariff if it makes a deal with China.

US gold futures April contracts rose around 1 per cent to $5,113.70 per troy ounce as the dollar index eased by 0.1 per cent, making bullion cheaper in overseas currencies.

Persistent safe-haven demand, steady central-bank accumulation, and expectations of accommodative global monetary conditions continue to underpin prices.

COMEX Silver has surged beyond the $99 mark, registering fresh lifetime highs.

Meanwhile, the two-day Federal Open Market Committee (FOMC) in the US this week is expected to hold interest rates steady but traders expect at least two rate cuts later in the year.

"Market focus has now shifted to the upcoming Federal Reserve decision, although speculation around political pressure on the central bank continues to dominate. These developments have strengthened the debasement trade, triggering strong inflows into silver and other precious metals," said Rahul Kalantri, VP Commodities, Mehta Equities Ltd.

"Gold has support at Rs 1,57,050 to Rs 1,55,310 zone while resistance at Rs 1,59,850 and Rs 1,62,950. Silver has support at Rs 3,38,810 and Rs 3,22,170 while resistance at Rs 3,55,810 and Rs 3,62,470," the analyst said.

Another analyst forecasts that gold is expected to hit Rs 1,65,000 per 10 gram and silver to reach Rs 3,65,000 per kg in the upcoming sessions.

Silver's sharp surge from Rs 60,000 to Rs 3,20,000 could lead to a phase of consolidation at elevated levels or rebalancing by market participants becomes more likely, according to a recent report.

—IANS

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