Gold prices in India moved higher today, tracking firm global rates and a weakness in the rupee. On MCX, gold futures were up 0.80% to ₹38,013 per 10 gram. Tracking gold, silver rates were also firmed up today, rising 1.36% to ₹44,485 per kg on MCX. Despite today's sharp gains, gold prices in India remain about ₹2,000 per 10 gram lower than their September highs of about ₹40,000 per 10 gram.
In spot markets, prices of 24 karat gold in Delhi rose ₹225 to ₹38,715 per 10 gram, helped by wedding season demand and rally in international prices, Press Trust of India reported, citing HDFC Securities. Silver prices jumped ₹440 to ₹45,480 per kg.
In global markets, gold prices were higher today amid worries that US-China trade talks are stalling. Unrest in Hong Kong also provided support for the precious metal. US and Chinese are close to a phase one trade deal, US President Donald Trump said at an event on Tuesday but offered no new details on negotiations. He said that US will accept a deal if it is good for the country. Spot gold prices rose 0.4% to $1,462.15 per ounce while silver gained 1% to $16.94 per ounce.
"Choppiness in equity markets has lent some support to gold price today. Equity markets turned choppy as market players continue to react to comments from US and China to assess possibility of a trade deal," Kotak Securities said in a note.
Many investors still remained on the sidelines. Holdings of the world's largest gold-backed exchange-traded fund SPDR Gold Trust fell to their lowest since September 20 on Tuesday.
Gold, which is up about 14% so far this year in international markets, is considered as a safe haven during economic and political uncertainty.
Gold traders will be looking for clues into US Federal Reserve's stance as chairman Jerome Powell is set to testify later today on the economic outlook before the congressional Joint Economic Committee.
Analysts say that growing geopolitical tensions are likely to offer lower level support to prices.
"Gold has been consolidating in a range after recent sell-off and while price is likely to hold near the support level of $1450/ounce level, the general sentiment is still weak owing to firmness in US dollar and reduced expectations of Fed rate cut," Kotak Securities said in a note. (With Agency Inputs)