Gold Prices Zoom Above Rs 31,000 After Biggest Gain Of This Year

Domestic gold prices closely track global prices, as India meets almost all its requirements from imports.

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Gold Prices Zoom Above Rs 31,000 After Biggest Gain Of This Year

Gold prices zoomed above Rs 31,000 per 10 grams.

Highlights

  1. Global price also rose due to weaker dollar and North Korea tensions
  2. Some analysts expect the gold to rise further
  3. Tracking gold, silver prices also went up today
New Delhi: Gold prices soared by Rs 990 - its biggest one-day surge this year - to Rs 31,350, tracking higher global prices. In the national capital, gold of 99.9 and 99.5 per cent purity zoomed by Rs 990 each to Rs 31,350 and Rs 31,200 per ten gram respectively, a level last seen in November 2016. Global gold prices hit their highest level in a year as the dollar sagged after weaker-than-expected US jobs data and as festering tensions over North Korea stoked safe-haven demand. Spot gold prices in New York rose to $1,353.12 an ounce, marking its strongest level since August last year. Domestic gold prices closely track global prices, as India meets almost all its requirements from imports. Besides that import duties and the dollar-rupee value also affects domestic gold prices.

5 Things To Know About Gold Price Rise
 

1) The escalating tensions between North Korea and the United States and a weaker dollar persuaded investors to take refuge in assets perceived to be safe-havens like gold. US President Donald Trump said on Thursday he would prefer not to use military action against North Korea to counter its nuclear and missile threat but that if he did it would be a "very sad day" for the Pyongyang leadership.

2) Some analysts expect the gold to rise further. "Gold continues breathing thin air at these rarified levels with the next technical target at $1,375," says an analyst.

3) After recent US government report showed employers added fewer jobs in August than expected, some traders held to expectations that the Federal Reserve would wait until the middle of 2018 before raising rates. Higher interest rates tend to boost the dollar and push bond yields up, putting pressure on gold prices by increasing the opportunity cost of holding non-interest yielding bullion.

4) The weakness of the US dollar has also contributed to the rise in gold prices. The price of dollar-denominated assets like gold typically rise with the fall in the value of dollar. The dollar skidded today after European Central Bank chief Mario Draghi on Thursday suggested the central bank may begin tapering its massive stimulus programme later this year. The dollar index, which tracks the greenback against a basket of six major currencies, was down 0.5 per cent at 91.187, after falling as low as 91.082, its weakest since January 2015.

5) Tracking gold, silver prices also went up by Rs 100 to Rs 42,000 per kg in the national capital.

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