Gold prices surged today in Indian markets in line with a firming global trend. On MCX, August gold futures rose 0.9% to 35,227, near earlier record highs of 35,409. Tracking gold, silver prices also firmed up, with September contracts on MCX rising 0.5% to 41,179. In global markets, gold prices had surged nearly 2.5% on Thursday after US President Donald Trump said he would impose additional tariffs on Chinese imports.

The US President said he would impose an additional 10% tariff on $300 billion worth of Chinese imports starting September 1, renewing trade tensions between the two countries, sending bond yields lower and also increasing the appeal of safe-haven assets like gold.

Trump's latest move has increased the chances of further rate cuts from the US Federal Reserve, say analysts. Lower interest rates and central bank buying are expected to help gold prices cement recent gains, they add. Gold traders are now awaiting the release of US non-farm payrolls data later today.

India's gold consumption in the June quarter rose 13% to 213.2 tonnes on higher jewellery and investment demand and softer prices, helping India surpass China as the biggest consumer of the metal in the world for the first time since the December quarter of 2013, according to World Gold Council (WGC). But high gold price is expected to soften gold demand in India this quarter. The fall in consumption could weigh on global gold prices that have risen nearly 10% so far this year. The government had hiked import duty on gold to 12.5% in the July Budget, sending gold prices to record levels.

Analysts say that scrap gold supplies in India could increase 15% in 2019 to around 100 tonnes as the rally in domestic gold prices prompt consumers to sell old jewellery. Erratic monsoon could also hurt demand from rural areas.

In India, gold demand usually rises in the October-December quarter due to the wedding season and festivals such as Diwali, when buying bullion is considered auspicious.

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