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On Monday, gold created history in the evening trade hitting the Rs 1 lakh per 10 grams milestone in physical markets.
In the international market, gold prices continued their record rally on Tuesday too with prices breaching the Rs 1 lakh mark. In India, the price hit Rs 1,00,116 per 10 gm, including the 3 per cent GST.
The rise in gold prices, which was witnessed during the last few days, is mainly due to the increasing global uncertainty, fuelled by tensions between US President Donald Trump and the US Federal Reserve Chair Jerome Powell over rate cuts, apart from an escalating trade war between the US and China, pushing towards macroeconomic uncertainty and leading to a flight to safe-haven assets like gold.
The sharp rally in domestic prices of gold is also due to mounting geopolitical tensions, a weaker dollar, increased central bank purchases and a strong demand from major consumers — India and China. As gold is priced in US dollars, a weaker dollar makes gold cheaper for buyers using other currencies, enhancing its appeal.
Since March 19, the domestic spot gold prices have risen over 4 per cent this month. Usually, gold prices tend to soar during uncertainty. Continued buying by China, institutional investors and central banks also fortified the bullish trend.
The increasing fears over a global trade war and a weakening US dollar pushed many investors towards the yellow metal. Investors are seeking refuge in gold as a hedge against uncertainty. Central banks are also increasing their gold reserves, adding to the increasing prices.
In Delhi, 24-karat gold soared Rs 1,650 to reach Rs 99,800 per 10 gms. In cities like Chennai and Mumbai, it was on the threshold of the five-digit figure in the spot markets, inclusive of the three per cent GST. In Hyderabad, the gold price touched Rs 99,500 in the spot bullion market at 9 pm last night, while it went beyond the Rs 1 lakh mark in Bengaluru.
Gold and silver showed very high price volatility amidst uncertainty in the global markets. The dollar index slipped to 3-year low after US President Donald Trump and the Fed chairman’s tussle over interest rate cuts.
Tags Gold Prices
