Gold, silver prices continue their upward trend; new lifetime highs recorded

On MCX, October gold futures were firm today, rising 1% to â‚¹39,152 per 10 grams

Post By : IJ News Service On 26 August 2019 11:23 AM

Gold and silver prices in India extended their record run today amid a rally in precious metal prices. On MCX, October gold futures were firm today, rising 1% to ₹39,152 per 10 grams, after hitting a new high of ₹39,196 earlier in the session. Tracking gold, silver September futures on MCX also hit a new life-time high of ₹45,148 per kg. In latest trade, silver futures were up 1.07% to ₹45,080. Escalating trade tensions between US and China and fears of a global recession has pushed gold prices to new highs in global markets.

Asian equity markets were under pressure today as US-China trade tensions sent investors rushing into safe havens such as gold and sovereign bonds. Emerging market currencies, including the rupee, were also under pressure. A weaker rupee increases the imported price of gold in India. In global markets, spot gold prices rose over 1% to $1,544.23 per ounce - their highest since April 2013 - getting a boost from a slide in bond yields. Yields on US 10-year Treasury debt dropped to their lowest since mid-2016. Lower interest rates boosts the price of gold.

Back in India, assets managed by gold exchange traded funds or gold ETFs rose to ₹5,079.22 crore in the first four months of the current fiscal. Globally, total gold-backed ETF holdings rose to 2,424.9 tons, about 1,000 tons higher than the post financial crisis lows of 1,425.1 tons, according to a recent Bloomberg report.

"For a long time, investors have stayed away from investing in gold ETFs/funds, as gold prices, after making a high around 2012, has retracted and remained range-bound since then. However, there has been a reversal in trend this year, with gold prices again moving up," Himanshu Srivastava, Senior Research Analyst and Manager Research, Morningstar Investment Adviser India said.

Record high gold prices, which are up over 20% in India so far this year, have however hurt jewellery demand in India. Jewellers have also reported a rise in supply of old gold jewellery as customers take advantage of high prices.

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