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Gold Prices Jump To Highest Level Of Year: 5 Things To Know
Gold prices surged by Rs. 200 to trade at Rs. 30,600 per 10 grams - their highest level this year - tracking higher global rates. Globally, gold prices shot up to their highest in nearly a year as investors bought safe haven assets after North Korea conducted its most powerful nuclear test, escalating the geopolitical tensions. Increased buying by local jewellers also lifted domestic gold prices.
Gold prices surged by Rs. 200 to trade at Rs. 30,600 per 10 grams - their highest level this year - tracking higher global rates. Globally, gold prices shot up to their highest in nearly a year as investors bought safe haven assets after North Korea conducted its most powerful nuclear test, escalating the geopolitical tensions. Increased buying by local jewellers also lifted domestic gold prices.
In domestic markets, silver also moved up by Rs. 200 to Rs. 41,700 per kg backed by increased offtake by industrial units and coin makers. Gold prices were at around Rs. 28,000 at the beginning of this year.
5 Things To Know About Rising Gold Prices
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.
Some analysts expect global gold prices to advance further. A weaker dollar also underpinned gold, which was likely to continue to rally in coming days, according to Tom Kendall, head of precious metals strategy at ICBC Standard Bank.
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.
Some analysts also don't see an immediate Fed rate hike and the shrinkage of the US central bank's massive sheet. On Friday, after a 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. "Another plus for gold is that we don't see an immediate rate hike and the shrinkage of the Federal Reserve's balance sheet," said Mark To, head of research at Hong Kong's Wing Fung Financial Group.
Investors were also looking ahead to a European Central Bank (ECB) meeting on Thursday. Markets are expecting no policy change from the ECB this month but the bank is likely to announce a reduction of its monthly asset purchases in October, according to a majority of economists in a Reuters poll.
