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India gold prices hit record Rs 39,270 per 10 grams in the opening futures trades on MCX with sharp jump of over Rs 500.
Prices tracked global rally in the yellow metal, hit USD 1543 an oz in US futures.
Indian markets showed signs of firm trend to continue leading upto a major landmark of Rs 40,000 per 10 grams ahead of the festivities. Market insiders see spot gold rates to stay firm amid escalating uncertainty in the global economy and ensuing festive buying in physical markets.
Spot markets
In spot markets, gold (999 purity) ended last week at Rs 37,758 as quoted by India Bullion and Jewellers Association (IBJA) rates for August 23. Silver 999 purity was last quoted at Rs 43,820 in spot markets.
MCX October futures opened firm and traded around Rs 39272 up by over Rs 500 or 1.3 per cent from previous close. The futures rallied by over Rs 1500 within a week from Rs 37,745 recorded last Monday.
CME Gold for August delivery has also witnessed a rally of over USD 50 an oz during past one week. On Monday trades, CME Gold for August traded at USD 1543 an oz, up USD 16 from previous close.
Rally in Gold prices
The rally in gold prices was fuelled after China imposed retaliatory tariffs against U.S. products in response to Washington's decision to increase import duties on some $300 billion of Beijing goods.
Indicative of sentiment, holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, have increased by about 27 tonnes so far this month.
"Technically market is under fresh buying as market has witnessed gain in open interest by 1.7 per cent. Now Gold is getting support at 38209 and below same could see a test of 37654 level, and resistance is now likely to be seen at 39070, a move above could see prices testing 39376," a Kedia Commodity's Bullion report said.
It also added that gold price rallied upwards strongly to breach 1503.24 level and reaches the thresholds of the first positive target at 1535.00. "..hinting the price head to achieve more expected gains in the upcoming period, noting that breaching the mentioned level will push the price to 1560 as a next main station, while holding above 1503.24 represents key condition to continue the expected rise."
An Angel Broking outlook on gold indicated likely shoot-up in the prices further. "The demand for the safe haven asset, Gold might shoot up as the tension between U.S. & China further ramped up. ON the MCX, gold prices are expected to trade higher today; international markets are trading lower by 0.24 percent to close at 1504.95 per ounce," it said.
For the Silver, outlook remains positive with prices likely to track gold rally. On MCX futures, Silver for September delivery gained Rs 646 or 1.5 per cent in morning trades on Monday to trade at Rs 45,248 a kg. Prices have rallied by close to Rs 2000 within a week from last Monday.
CME Silver for September delivery traded lower at USD 17.62 an oz on Monday from its previous close of USD 17.41.
In its outlook on Silver, Kedia Commodity hinted at a slight positive trading in silver. "..in attempt to move away from the bullish channel’s support, keeping the bullish trend vaild and active for today, waiting for testing 17.30 level initially, reminding you that the continuation of the expected rise requires holding above 16.85 and 16.50 levels. The expected trading range for today is between 16.80 support and 17.30 resistance."
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