The price of gold rose 1.67 per cent in the spot market here on Thursday, following global developments. Mounting geopolitical tensions raised the bullion’s safe heaven appeal. Standard gold in Zaveri Bazaar (Mumbai) jumped Rs 623 to close at Rs 37,848 per 10 gram on Thursday, from its previous close of Rs 37,225 per 10 gram on Tuesday.
Over the last two days, however, spot bullion prices in London have risen sharply, following heightening tensions between the US and Iran. The ongoing trade war between the US and China, too, has added to global economic uncertainty, which has encouraged consumers to book on correction.
Rising tensions in West Asia, following the attack on Saudi Arabia’s largest oilfield Aramco, has added fuel to fire with respect to gold.
“Bullion prices found support after the US announced tariffs on European goods, following the World Trade Organization’s (WTO) green light for the US to impose levies on $7.5 billion worth of European Union (EU) goods. This led to further uncertainty over the global economic outlook. Weak data in the US and Europe, over the last two days, have added to the gloom and augured well for gold and silver. Bullion is expected to continue its bullish trend,” said Pritam Kumar Patnaik, head (commodities), Reliance Commodities.
Gold prices had, on Monday, corrected to trade at Rs 37,225 per 10 gram, which offered consumers opportunity to book jewellery for festival and the upcoming wedding season. Thursday’s revival of gold prices, however, eluded jewellery stores again.
“Gold price improved on account of safe-haven demand from investors on concerns over extending US-China trade conflicts. Wobbly global stock markets, worries over a global slowdown, slowing manufacturing activity in the US, and concerns in West Asia also supported the price of the yellow metal. However, the rise in gold prices could be capped by investors looking to book profits, amid strong technical resistance at Rs 38,450 per 10 gram for the near-month contract on MCX,” said Sunilkumar Katke, head (commodities and currency), Axis Securities.
Prices are hovering at 2 per cent below the metal’s lifetime high, of Rs 39,031 per 10 gram hit on September 4. In global markets, however, prices have surpassed the psychological barrier of $1,500/oz to trade at $1,501 in the benchmark London market, after falling to its recent low of $1,472/oz on September 30.