Gold prices hit a new high on Tuesday amid fall in Indian rupee and political tensions in Honk Kong. Gold prices surged high on account of high demand for safe-haven at physical markets and tracking global trends. On the Multi Commodity Exchange (MCX), the most-traded October contract of the yellow metal to Rs 38,666 per 10 gram on Tuesday. The yellow metal for delivery in December also rose by Rs 279, or 0.72 per cent, to Rs 39,130 per 10 gram in a business turnover of 587 lots. Globally, the yellow metal prices touched their highest in more than six years amid fears of the global economic slowdown. Spot gold rose 0.3% to $1,515.32 per ounce as of 0334 GMT, after hitting its highest since April 2013 at $1,518.03. The US gold futures surged 0.6% to $1,526.90 an ounce, according to Reuters.
“Gold prices on MCX gained to mark another new lifetime high on strong safe-haven demand amid political tensions in Hong Kong, also support seen as Indian Rupee dropped to test 71.3975 on futures. The pro-democracy protests in Hong Kong continued, and China asked Western diplomats not to interfere in Hong Kong. There may be disruption in the global markets, especially after several flights were cancelled due to the protests,” Ajay Kedia, Director, Kedia Commodity told Financial Express Online.
Gold and silver for yet another session has gone northward since rupee has depreciated, global equities have fallen and safe-haven demand has gone up as investors sought haven amid geopolitical tensions and fears for economic growth, Jigar Trivedi, Fundament Analyst - Commodities at Anand Rathi Shares and Stock Brokers told Financial Express Online.
The Reserve Bank of India in its monetary policy earlier this month said the gold prices had risen on the back of an increase in demand for the safe haven. The monetary policy committee noted that global economic activity has slowed down since its meeting in June in an environment rendered hostile by elevated trade tensions and geopolitical uncertainty. Reflecting subdued demand conditions, crude oil prices have fallen sharply since mid-May. On the other hand, gold prices have risen, propelled by increased safe-haven demand, the central bank had said.