Gold & Silver

Spot gold jumps ₹800 on weak rupee, global demand

Rutam Vora Ahmedabad | Updated on August 02, 2019 Published on August 02, 2019

Representative image   -  Getty Images/iStockphoto

Gold prices in the Indian spot market jumped ₹792 to ₹35,413 for 10 grams on Friday, amid strong global cues for the yellow metal. The rates quoted by Indian Bullion and Jewellery Association (IBJA) for 999 purity gold stood sharply up from Thursday's closing rate of ₹34,621.

In futures, opening trades Friday on MCX showed Gold August futures gaining 0.68 per cent or ₹238 to trade at ₹34,514 per 10 grams. In later trades, August Gold quoted at ₹35,276 up ₹360 or 1.03 per cent. The October contract strengthened further to ₹36,005, up over 1 per cent or ₹372 in the evening trades.

COMEX August Gold firmed by $16.4 to $1,437.3 during Friday trades with highs of $1,448, up from Thursday's closing of $1,420.9.

Analysts attributed the rally in gold prices to global uncertainty and growing trade tension between the US and China. Also, the latest report by the World Bank put India at the seventh rank with the size of the GDP at $2.72 trillion for 2018, down by one rank in 2017. The UK with $2.82 trillion and France with $2.77 trillion stood ahead of India in the global ranking.

Rupee weakened on Friday to close at ₹69.58 against a dollar, down from ₹69.06 on Thursday. So far in 2019, rupee has touched a record low, closing at ₹71.82.

“This development has caused the rupee slide which may also touch ₹70.50 against a dollar given the current situation. This will support prices in gold and silver. Considering the global scenario and weak equity markets, we may see gold prices touch ₹36,200 levels soon and eventually may test ₹37,000 during this month. Internationally, it may touch $1,500 levels," said Ajay Kedia, Director, Kedia Commodity told Businessline.

Also on radar will be the emerging physical demand for the yellow metal in the ensuing festival season starting after August 15, Rakshabandhan.

India gold prices reflected global upside in the precious metal after US President Donald Trump signalled imposing additional 10 per cent tariff on Chinese goods. The escalating trade-war situation between the two large economies has further fuelled the demand for gold as a safe-haven asset.

IBJA quoted silver prices at ₹40,755 a kg, up by ₹740 from Thursday's close. In the futures market, MCX September silver contract traded at ₹41,246, up ₹260 or 0.6 per cent.

On technical charts, analysts see silver prices finding support at ₹40,411 with a possibility to test ₹39,835 levels. The resistance is likely to be seen at ₹41,437, a move above could see prices testing ₹41,887, Kedia stated.

On COMEX, Silver futures for August contract stood at$16.135 an ounce up $0.014 from previous close of $16.121 on Thursday.

 

Published on August 02, 2019
This article is closed for comments.
Please Email the Editor