Gold and silver prices rose closer to record highs in Indian markets today, bucking global weakness. A sharp fall in rupee's value against the US dollar pushed gold and silver prices higher in Indian markets. On MCX, gold futures rose 0,42% to 39,109 while silver futures hit a new high of 48,970, rising about 0.5%. The rupee tumbled to 72.37 a dollar against the US dollar, amid a broad strengthening of the greenback, as compared to its previous close of 71.40 a dollar. Gold prices had hit a new high of 39,425 last week.

In global markets, gold prices slipped 0.3% to $1,525 an ounce after hitting a six-year high of $1,554.56 last week. Gold prices are up around 20% so far this year amid inflows into gold-backed assets. US-China trade war, volatility in risk assets like equities, and central banks signalling a looser monetary policy have boosted the safe-haven appeal of gold. Analysts at Goldman Sachs and UBS Group say gold prices are likely to advance further as demand for ETFs rises.

Inflows into gold-backed ETFs topped 100 tons in August, the highest since February 2013, according to a Bloomberg report. Holdings rose 101.9 tons, bringing total known assets to 2,453.4 tons, the third straight monthly increase after the addition of a combined 154.1 tons in June and July, the report added.

Veteran investor Mark Mobius also remains positive on gold, saying that investors should allocate about 10% of their assets in physical gold.

In the latest escalation in their trade war, the US on Sunday began imposing 15% tariffs on a variety of Chinese goods on Sunday while China also imposed new duties on US crude oil. China also said that it has lodged a complaint against the US at the World Trade Organization over US import duties.

Back in India, jewellers hope that upcoming festive season will improve gold demand, which has been hurt due to high prices. The domestic price includes a 12.5% import tax and 3% sales tax. The depreciation of the rupee, which is down about 3.5% so far this year, and an import duty hike in July, have pushed gold prices to record highs in India.

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