Gold prices in India on Friday jumped from one-month lows before closing marginally higher, lifted by a rally in global markets. On MCX, October gold futures settled 0.11% higher at ₹37,727 per 10 gram, after recovering from one-month lows hit earlier during the session. Gold traded in the range of ₹37,438 to ₹37,750 during the day. A rally in global markets helped lift domestic gold prices from one-month lows. Silver prices however continued to struggle though they ended off day’s lows.
Silver prices on MCX fell 0.20% to ₹46,523 per kg, after falling to ₹46,151 earlier in the day.
Gold and silver prices in India remain significantly lower than their record highs hit earlier this month. Gold prices are down about ₹2,000 per 10 gram from highs of ₹39,885 while silver rates have fallen about ₹5,000 from highs of ₹51,489.
In global markets, gold prices on Friday rallied 1% to above $1,515 an ounce. Gold rose 1.1% to $1,515.90 an ounce after a renewed flare-up in trade tensions between the US and China sent Wall Street lower. Hopes of a quick breakthrough in US-China trade talks faded after Chinese officials unexpectedly cancelled a visit to farms in Montana and Nebraska in US as deputy trade negotiators wrapped up two days of negotiations in Washington.
In India, despite the recent drop in gold prices, gold demand remained subdued demand because of the Shradh period, which is considered inauspicious for buying bullion, according to a Reuters report, citing a Mumbai-based gold wholesaler. High prices also hurt demand. Gold prices in India are up about 20% so far this year.
Demand for gold usually picks up in the October to December quarter as India gears up for festivals such as Diwali and Dussehra, when buying gold is considered auspicious.
Apart from rupee dollar exchange rate and global rates, domestic gold jewellery prices include 12.5% import tax and 3% GST.
Analysts say that concerns about trade war, slowing global growth and increased geopolitical tensions will keep gold prices supported. Earlier, this week, though the US Federal Reserve cut interest rate but it gave mixed signals about future rate cuts. Lower interest rates give a boost to non interest yielding assets like gold. (With Agency Inputs)