Gold prices steady after rising for five days in a row, silver rates jump2 min read . Updated: 27 Aug 2019, 04:30 PM IST
- Gold prices are up about 20% so far this year in India, hitting multiple highs
- High prices have dampened gold demand in India
New Delhi: Gold prices in Indian markets remained steady today after rising for five consecutive days. Gold was steady at ₹39,670 per 10 gram, Press Trust of India reported, citing All India Sarafa Association. Silver prices rose ₹190 to ₹46,740 per kg. In the national capital, gold of 99.9% and 99.5% purity held flat at ₹39,670 and ₹39,500 per 10 gram, respectively.
The futures market also showed similar trend. On MCX, October gold futures slightly lower at ₹38,775, after they high a new high of ₹39,340 on Monday. September silver futures on MCX also remained flat at 45,039, off its Monday's record high of ₹45,376. In global markets, spot gold prices eased off six-year highs after US President Donald Trump on Monday predicted a trade deal with China after positive gestures by Beijing.
As investors returned to riskier assets, global gold prices also eased from a six-year high. Spot gold was trading around $1,528.35 an ounce after they hit a fresh six-year high above $1,550 on Monday. Global equity market recovered on the easing of rhetoric between Washington and Beijing.
Indian rupee also inched higher today against the US dollar amid strength in Asian currencies. Indian stock markets also were higher today after Monday's big rally. A weaker rupee, which fell to 72.25 a dollar on Monday amid a global risk-off sentiment, had pushed gold prices in Mumbai to ₹40,000 per 10 grams on Monday, news agency IANS reported.
Gold prices in India have rallied 20% this year amid a hike in import duty, weaker rupee and a firm global trend.
However, high prices have dampened gold demand in India. "Spread between MCX and international gold price narrowed from near $51/oz to about $42/oz showing some signs of buying interest in physical market. However, higher domestic price and higher taxes continue to remain a dampener for demand. Demand is also expected to weaken during September amid Shradh period," Kotak Securities said in a recent report.
US-China trade friction, global economic uncertainty and loose monetary policy stance have spurred many analysts to turn positive on gold. UBS Group AG analysts predict gold may hit $1,600 within three months.
Gold is also likely to get support from buying by global central banks. Many countries have been adding to their gold reserves as growth slows and trade and geopolitical tensions rise, and they seek diversify away from the dollar. (With Agency Inputs)