New Delhi: Gold prices today surged to fresh all-time high in India, tracking firm global rates. On MCX, October gold futures rose 0.70% to a new high of ₹38525. Silver futures on MCX surged 1.4% to ₹44,280. Apart from higher global rates, a weakening rupee, which today moved past 71 mark per dollar, boosted domestic gold prices. In spot markets, gold had advanced by ₹50 to all-time high mark of ₹38,470 per 10 gram in the national capital on Monday, Press Trust of India reported, citing All India Sarafa Association.
In global markets, gold prices stayed above the psychological $1,500 level, with spot gold up 0.6% at $1,505. Safe-haven demand for gold increased on concerns over slowing global economic growth as the trade war between Washington and Beijing dragged on.
Last week, US President Donald Trump said on Friday he was not ready to make a deal with China, putting the September round of trade talks into jeopardy. Global equity markets struggled on worries that a prolonged US-China trade war and damaging Brexit could tip top economies into recession.
Negative yielding bonds, estimated at around $15 trillion globally, were further supporting bullion, say analysts. In global markets, gold prices have rallied 17% so far this year.
Gold traders will be eyeing Federal Reserve’s annual symposium at Jackson Hole later in the week.
Hitesh Jain, vice president at Yes Securities, attributed the recent surge in gold prices to global central bank easing, surging market value of negative bond yields and strong fund buying.
Despite the sharp rise in gold prices this year, analysts from Goldman to Citi to Bank of America Merrill Lynch still remain bullish on the the precious metal.
Vinod Nair, head of research at Geojit Financial Services, said that there are fears that global slowdown can get extended to CY2020 given uncertainty about US-China trade agreement, BREXIT and geo-political issues. “As a result, equity is loosening its attractiveness as an investment class and funds are shifting to haven assets like bonds and gold,” he added.
India’s gold imports increased 35.5% to $11.45 billion during April-June quarter of the current fiscal, according to commerce ministry data. But analysts say that the imports are likely to fall sharply during the July-September quarter as record high prices hit demand.