Gold prices surge today to record highs, silver rates zoom2 min read . Updated: 05 Aug 2019, 04:39 PM IST
- Gold prices are sharply up this year, boosted by safe-haven demand
- Silver rates are also catching up with the gold price rally
New Delhi: Gold prices surged to all-time highs in Indian markets, tracking firm global rates, amid an escalation in US-China trade tensions. Gold prices rose ₹800 to hit an all-time high of ₹36,970 per 10 gram at the bullion market. Tracking gold, silver prices also soared ₹1,000 to 43,100 per kg. A weaker rupee, which fell past 70.50 a dollar, also led to higher domestic gold prices. Gold of 99.9% and 99.5% purity surged ₹800 to ₹36,970 and ₹36,800 per 10 gram, respectively. Silver ready rose ₹1,000 to 43,100 per kg.
In futures markets, gold prices in India today hit new highs. On MCX, August gold contracts surged nearly 2% to ₹36,250 per 10 gram while October contracts rose nearly 2% to ₹36,977, with both the contracts hitting new highs. Tracking gold, silver also rosemade a new high after September contracts on MCX rose 2.7% to ₹42,493 per kg. In global markets, gold prices were ruling above the important mark of $1,450 an ounce, boosted by its safe-haven appeal as risk assets like stocks getting hammered amid global geopolitical and trade tensions.
In global markets, gold prices were rose 0.7% to six-year high of $1,459 an ounce. Gold prices got a boost after US President Donald Trump last week in a surprise move announced that he would slap 10% tariffs on $300 billion in Chinese imports, renewing trade tensions between world's two biggest economies. China has vowed to fight back. The sudden escalation in the China-US trade war sent investors stampeding to traditional safe harbours including the yen, bonds and gold. Asian shares today slid to over 6-month lows.
Lower interest rates, central bank buying and resurgent investor interest are expected to support gold prices, according to a Reuters poll of analysts. Fears of a global slowdown have sent investors flooding to bullion, traditionally seen as a safe asset to hold in troubled times.
Investors stormed back into both gold and silver in June and July, helping to drive up prices. Silver prices are also up sharply this year. Lower interest rates makes non-yielding gold and silver more attractive.
"All is not well with global equities as an asset class but gold can be a defensive play given that a reversal in interest rate cycle has begun," says Jimeet Modi, founder & CEO of SAMCO Securities. Bets on higher prices for both metals on the COMEX exchange now outnumber bets on lower prices by the largest amount since 2017, while holdings of silver in exchange traded funds tracked by Refinitiv surged to the biggest on record, Reuters reported.
However, record prices could soften gold demand in India, says World Gold Council (WGC). Higher prices have also increased the supply of scrap supplies in India, dealers said. India raised import duties on gold to 12.5% from 10% last month.