The yellow metal which eased in price last week following hopes of resumption of US-China talks continued its upward trajectory with an over 1% surge after Saturday's drone attack on Saudi Arabia's oil processing unit.
October gold futures prices on the MCX were trading higher by Rs 491.00 or 1.31% at Rs. 38015.00 per 10gm. At the same time, silver in line also surged in price by 2.4% or Rs. 1100 to Rs. 46,856 per kg. The sharp gains in domestic gold price today come on the back of weakness in rupee which again headed lower to 71.62 per US dollar. And as India imports most of its gold requirement, weakness in the home currency renders the yellow metal expensive in the domestic markets.
Globally, tracking weak Middle-East geopolitical sentiment that poses threat of a retaliatory attack, safe haven appeal of gold once again gains momentum. It is worth mentioning here that even as Houthi group of Yemen claimed responsibility for the attack, the US is pointing out fingers on Iran, which is a Houthi ally.
Gold was spotted trading higher by 1.6% to $1,512 in Singapore while silver rallied by as much as 3.2% to $17.9938 per ounce. Also, the fact that analysts expect a further rate cut from the US Federal Reserve's meet scheduled for September 17-18 is providing a positive support. Last week, the European Central Bank (ECB) announced a fresh stimulus to the tune of 20 billion euro that comes into effect from November 1, 2019. The move prompted profit-booking in the dollar index.
Earlier in the month, gold prices in the global market hit a 6-year high of over $ 1550 per ounce as global economic slowdown concerns fuelled likelihood of rate cut by major central banks.