Gold prices hold near near six-year highs2 min read . Updated: 24 Jun 2019, 09:29 AM IST
- Gold price in India includes a 10% import tax and 3% GST
- Weaker dollar and heightened tensions between the US and Iran increased safe-haven demand for gold
Gold prices today extended gains in early Asian trade on Monday, hovering near a six-year peak touched in the previous session, as a weaker dollar and heightened tensions between the United States and Iran underpinned the precious metal. Spot gold was up 0.6% at $1,406.56 per ounce in global markets, heading for a fifth straight session of gains. Gold prices hit $1,410.78 on Friday, their highest since September 4, 2013. US gold futures rose 0.7% to $1,410.20 per ounce.
Back in India, gold futures for August delivery on MCX traded 0.42% higher at ₹34,310 per 10 gram.
Meanwhile, physical gold discounts in India have widened as an upsurge in local prices dampened purchases. The domestic price in India includes a 10% import tax and 3% GST.
US President Donald Trump said last week that he called off a military strike to retaliate for Iran's downing of an unmanned US drone, and he said on Sunday that he was not seeking war with Iran.
But US Secretary of State Mike Pompeo also said "significant" sanctions on Iran would be announced, aimed at further choking off resources that Tehran uses to fund its activities in the region.
The dollar fell to a three-month low against a basket of currencies on bets the US Federal Reserve would start lowering interest rates.
The Fed and the European Central Bank last week hinted they were open to ease policies to counter a global economic slowdown, exacerbated by global trade tensions.
The focus now shifts to whether Washington and Beijing can resolve their trade dispute at a summit in Japan this week of leaders from the Group of 20 leading world economies.
Chinese President Xi Jinping will attend the G20 summit in Japan this week, state-run Xinhua news agency said on Sunday, giving the first official confirmation of his attendance at a gathering where he is expected to meet U.S. President Donald Trump.
Meanwhile, the US Commerce Department said on Friday it was adding several Chinese companies and a government-owned institute involved in super computing with military applications to its national security "entity list" that bars them from buying U.S. parts and components without government approval.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 4.57% to 799.03 tonnes on Friday from 764.10 tonnes on Thursday.
Hedge funds and money managers boosted their bullish stance in COMEX gold in the week to June 18, the U.S. Commodity Futures Trading Commission said on Friday.
Physical gold discounts in India widened to their highest in almost three years last week as local prices surged to record peaks, while Asian hubs, barring China, saw aggressive selling from customers as global bullion rates scaled a six-year peak.