Gold has scaled up further to $1524/ounce today, up from yesterday’s close of $1511 and Friday’s close of $1496. In this speed, it looks like $1600-mark is not far off.
Geo-political tensions are rising across globe paving way for gold prices to move higher.
Today, as the equity bourses across globe opened, there was a new development to digest.
On Monday, there was a steep 40 per cent (in dollar terms) correction in S&P Merval – the bellwether stock index of Argentina. The index closed at 27,530 on Monday, down from Friday’s close of 44,358. This followed the Argentine President Mauricio Macri loss in the election which was unexpected by the market. The country’s currency Peso too corrected sharply vis-à-vis the greenback yesterday dropping to a low of 61.998 against the USD and closing at 53.
Gold has been supported also by tensions in Hong Kong moving to the front burner again with mob protests increasing and the operations of the country’s Airport being shut down.SPDR Gold Trust, the largest gold-backed ETF reported holdings of 847.77 tonnes on Monday, up from 839.85 tonnes.
Equity indices across Asia including Topix, Nikkei, Hang Seng and Shanghai are down now by 1-2 per cent.
The slowing global growth is also hitting nerves of investors. There are expectations that the Federal Reserve may cut another 25 basis points in its policy meet in September.In India, gold futures in MCX is trading at Rs 38,556, up from previous close of Rs 38,241.