Gold prices in India rose sharply today amid a rebound in the rates of the yellow metal in global markets. On MCX, gold futures prices rose as much as 1.3%, or about ₹500, to ₹38,386 per 10 gram. Tracking gold, silver also jumped, with prices jumping 2% or ₹1,100 to ₹45,944 per kg. Gold prices in India have remained choppy over past few weeks since hitting record highs early last month, reflecting similar trend in global markets.
A similar trend was seen in domestic spot markets with prices of 24 Karat gold jumping nearly ₹350 to ₹39,115 per 10 gram in Delhi, Press Trust of India reported. Silver also zoomed ₹1,630 to ₹47,580 per kilogram here.
In global markets, gold prices are back above $1,500.59 per ounce amid renewed fears of a global slowdown. Gold prices in global markets had risen 1.4% on Wednesday, the biggest one-day percentage gain in over a month. Indian commodity exchange MCX was closed on Wednesday due to a public holiday.
In the US, a key factory index fell to a 10-year low as businesses held back investments amid the US-China trade war. And the ADP Research Institute in a report said that US companies is cooling. Meanwhile, the Trump administration has opened a new front on the trade war front by saying it will impose tariffs on $7.5 billion of goods from the European Union in retaliation for European Union subsidies on large aircraft.
The weakening data has however increased chances of a third-straight reduction in interest rate from US Federal Reserve at the October 29-30 meeting.
Gold prices benefit from lower interest rates. Reflecting the increased safe-haven appeal of gold, the holding at SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.32% to 923.76 tonnes on Wednesday.
“Gold has bounced back to trade near $1500/oz level after slumping to a 2-month low of $1459.14/oz earlier this week. Gold has recovered amid correction in US dollar index from recent 2-year high. The US currency came under pressure amid disappointing economic data and drop in bond yields. Also supporting gold price is trade concerns and geopolitical tensions,” Kotak Securities said in a report.
Analysts expect gold prices to remain choppy trade as market players react to economic numbers and trade related development.
“Silver has witnessed a sharp recovery after taking support near $16.8/oz level. Rebound in gold and mixed trade in industrial metals has lent support to silver price. Silver along with gold has benefitted from correction in US dollar,” Kotak Securities added.
Weighed down by worries of a global slowdown, global equity market sentiment has also weakened, with Wall Street suffering big losses on Wednesday.
Back in India, retail gold demand is expected to pick up this quarter due to the festive and wedding season. The Reserve Bank of India has announced that two tranches of gold bonds will be open for subscription this month during October 7-11 and October 21-25. The issue price of gold bonds will depend on the average price of gold for the last three working days of the week preceding the subscription period.
