Gold & Silver

Gold price at new life-time high, inches closer to ₹40,000/10 gm

Rutam Vora Ahmedabad | Updated on August 27, 2019

Spot gold rallies over ₹4100


Tailing the global rally, gold prices in India made a new all-time high at ₹38,715 per 10 grams (999 purity) in spot markets on Monday, rallying by nearly ₹4,100 so far in August.

Prices as quoted by the India Bullion and Jewellers Association (IBJA), showed spot gold hitting a high of ₹38,960 during the day.

Gold has gained momentum after multiple global events since Friday, which have triggered safe-haven demand for the yellow metal.

Also, adding the to fuel for gold rally is the depreciating rupee against the dollar, which was quoted at ₹72.02 against the dollar.

“The rupee depreciation pushed up the gold prices. Two major global events, the US-China trade war and the Fed Chairman’s speech on measures to sustain the US economic expansion, accelerated the rally.

We saw Comex gold rallying after this to touch$1543, which was echoed in the Indian market and we saw the gap-up opening today,” said Ajay Kedia, Director, Kedia Commodity.


Firm trend

Kedia expects gold prices to stay firm going forward and may test $1,580 in near term in international markets, triggering prices in India to inch towards ₹40,000.

Industry players believe that besides the currency and the US-China trade war escalation factors, a weak economic outlook and geo-geopolitical tension in West Asia and India-Pakistan tensions indicate one-sided worry.

“There is no immediate relief in sight from these tensions in near future. Comex gold will touch about $1,580 from current levels. So in India we may see ₹41,000-41,500 levels even if there is a festive season. Such high price levels will affect the festive buying as well and we may not see a sparkling festival season for the gold and jewellery sector this year,” Haresh Acharya, director, IBJA told Businessline.

He added that due to reduced discretionary spend by consumers, gold buying will remain under pressure.

In Futures market, MCX October Gold opened firm and traded around ₹39275 in early hours, but moved lower at ₹38,993 by later hours. Futures prices have rallied by over ₹1,500 within a week from ₹37,745 recorded last Monday.

CME Gold for August delivery has also witnessed a rally of over $50 an oz during past one week.

On Monday trades, CME Gold for August traded at$1525 an oz, marginally down from previous close.

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.

Published on August 27, 2019

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