Gold prices on Wednesday opened above Rs 41,000 in india’s spot and futures market following a sharp jump in morning trade in the international market. In the first half, standard gold was trading at a GST inclusive price of Rs 42,300 per 10 gram. The international price in the spot market hit a high of $1595 today.
Gold saw another jump on Wednesday following Iran’s attack on a US military base in Iraq, which increased the tension in the region. On the Multi-Commodity Exchange (MCX), gold for delivery in February opened at Rs 40946/10g today, but soon shot up to Rs 41293/10g by afternoon. However, profit booking pulled down its prices to settle at Rs 40663/10g in the morning session.
In the London spot market, gold prices rose to the level of $1611/oz in early Wednesday trade before falling to trade at $1577/oz by afternoon there.
Mumbai spot gold closed Rs 312 higher at Rs 40,687 per 10 gram for standard gold. Since silver and crude oil prices move in tandem, while silver price on MCX ended on Wednesday with a marginal gain, crude oil slipped by 0.22 per cent following global move.
High volatility in bullion prices has prompted brokerages to reduce leverage to their clients in order to protect their mark-to-market (M2M) margins.
Brokers said they have reduced leverages to most of their clients to twice the intra-day trading limit now as compared to five times earlier. This was done to avoid possible default of clients as seen in the past. The reduction in intra-day leverages, however, may affect trading volume on the exchange platforms that deal with precious metals and energy.
“Many brokerages have taken selective calls to reduce intra-day leverages which facilitates to clients to manage risk in case of high volatility. This is also in line with a recent Sebi circular which asked brokerages to give leverages to clients based on margins of the respective exchanges and brokers,” said a senior official with a leading commodity broking firm.
“While bullion is getting support on safe haven buying, crude prices did not move up much due perhaps to less impact on oilfields of Iran’s missile attack on US military base in Iraq. Gold, however, is overbought. Hence, a correction in gold prices cannot be ruled out after the ongoing instability in the Middle East evades,” said Gnanasekar Thiagarajan, Director, Commtrendz.
Gold price jumped to set a new record here on Wednesday following global moves on escalating geo-political tensions in the Middle East with Iran’s missile attack on the US military base in Iraq.