Gold and silver prices in India jumped sharply tracking higher global rates and a softer rupee. On MCX, October gold futures prices today shot up by 1.7% to ₹38,163 per 10 grams as compared to Friday's close of ₹37,503. Silver prices on MCX also shot up by 3% or ₹1,326 to ₹47,087 per kg. Saturday's drone attacks on Saudi Arabia's biggest oil processing facility have pushed global oil prices sharply higher and also brought back the spectre of a retaliatory attack. The US has accused Iran of being behind drone attacks on Saudi oil facilities. The rupee today weakened to 71.67 per dollar, raising the cost of domestic gold prices as India imports most its gold requirement.
In spot market, gold prices of 24 karat in Delhi climbed ₹460 to ₹38,860 per 10 gram while silver zoomed ₹1,096 to ₹47,957 per kg, Press Trust of India reported, cited HDFC Securities data.
Silver also zoomed ₹1,096 to ₹47,957 per kilogram. In the previous trading, silver closed at ₹46,861 per kilogram.
In global markets, gold and silver prices shot up as Middle East geopolitical tensions boosted the demand of safe-haven assets like gold. Gold prices today jumped as much as 1.6% to $1,512 while in Singapore, while silver advanced as much as 3.2% to $17.9938 an ounce. Also driving gold prices higher is expectation of further rate cuts from the US Federal Reserve at its September 17-18 meeting. Earlier this month, global gold prices hit a six-year high above $1,550 an ounce as slowing global growth drove expectations of central bank easing.
An attack on Saudi Arabia's largest oil processing plant pushed oil prices the most on record. London’s Brent futures surged almost 20%, taking the global benchmark just shy of $72 a barrel though they later pared some gains.
Analysts say the longer-term impact on global oil prices depend on how long production is disrupted and the attack's future implications.
Yemen's Houthi group claimed responsibility for Saturday's attacks that knocked out more than half of Saudi oil output or more than 5% of global supply, but US Secretary of State Mike Pompeo said the assault was the work of Iran, a Houthi ally.
Higher oil prices tend to hurt the economy as consumer costs rise. That the attack on its oil infrastructure could lead Saudi Arabia to launch a military strike in retaliation pushed investors into gold.
Prior to the attack on Saudi's oil infrastructure gold and silver prices have been on a declining trend as hopes of easing in US-China trade tensions dented some of the safe-haven appeal of gold. On Friday, gold on MCX had extended losses to the seventh day, falling over ₹2,000 per 10 gram from its record highs of ₹39,885, hit earlier this month.
The sharp rally in gold prices this year has dented jewellery demand. Gold imports plunged had 62% to $1.36 billion in August. Average price of 10 grams of gold rose 20.7% year on year year-on-year in rupee terms in August 2019, domestic brokerage Motilal Oswal said in a note. (With Agency Inputs)