Gold prices hit record highs for second day in a row, silver rates soar2 min read . Updated: 21 Aug 2019, 06:50 PM IST
- A global rally and a weaker rupee have pushed gold prices in India to record highs
- However, high prices have gold demand
New Delhi: Gold prices in India are on a record run. Gold prices today advanced ₹50 to hit a new high of ₹38,820 per 10 gram at the local bullion market, news agency Press Trust of India reported, citing All India Sarafa Association. Silver prices soared by ₹1,140 to ₹45,040 per kg. Gold of 99.9% and 99.5% purity rose ₹50 each to ₹38,820 and ₹38,650 per 10 gram. On Tuesday, gold prices on Tuesday touched a record high of ₹38,770 per 10 gram.
However, futures markets showed some softness. On MCX, October gold futures were down 0.32% to ₹37,883 while September silver contracts were down 0.77% to ₹43,602.
High gold prices have however hit gold demand in India with July imports falling significantly from year-ago levels. Also, floods in key gold-buying states like Kerala and Karnataka have also impacted domestic gold sales. Jewellers have also reported an increase in supply of old gold jewellery.
In global markets, gold prices remained steady, holding around the key $1,500 an ounce level. Investors awaited the minutes of the US Federal Reserve's July meeting, due later today, for clues on US interest rates.
Some analysts say that gold and silver could come under some profit-taking in the near term but a sharp decline is unlikely. "Silver along with gold may remain under pressure in the near term as halt in rally may pave way for profit taking however a sharp decline is unlikely," Kotak Securities said in a 20 August report. "While tensions have eased to some extent, market confidence remains low that a deal may take place soon. Also US-China tensions are not restricted to trade but involve currency manipulation charges and Hong Kong protests as well," the brokerage added.
Also, on gold investors radar is the US central bank's Jackson Hole seminar later this week. US Federal Reserve Chair Jerome Powell's speech will be crucial for cues on futures interest rates. They would also be watching this weekend's G7 summit on what additional steps policymakers may take to boost economic growth. Traders mostly expect that US Federal Reserve could go for another 25 basis-point cut in US interest rates in September. Lower interest rates boost the appeal of non-interest yielding assets like gold.
Global equity markets have recovered this week after on expectations that major economies like China and Germany would announce stimulus to boost growth.
Investors continued to pile into gold ETFs despite talk of stimulus measures in some major economies. SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.21% to 845.17 tonnes on Tuesday.
The uncertainty over US-China trade deal continued to support gold prices. US President Donald Trump on Tuesday said he had to confront China over trade even if it caused short-term harm to the US economy because Beijing had been cheating Washington for decades. (With Agency Inputs)
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