Business: Gold prices in Delhi rose by Rs 1,950 to a new record high of Rs 1,27,950 per 10 grams on Monday due to increased demand for safe investments amid the recent trade tensions between the US and China. According to the All India Bullion Association, gold of 99.9 percent purity had closed at Rs 1,26,000 per 10 grams on Friday.
According to the Sarafa Association, gold of 99.5 per cent purity rose by Rs 1,950 to hit an all-time high of Rs 1,27,350 per 10 grams (including all taxes), according to the Bullion Association. In the last market session, this yellow metal had closed at Rs 1,25,400 per 10 grams. Jatin Trivedi, Vice President Research Analyst (Commodity & Currency), LKP Securities, said, “Gold prices rose sharply due to increased demand for safe haven investments due to increased trade tensions between US and China.”
The US administration’s announcement of 100 percent tariff increase on select Chinese products and China’s threat to restrict exports of rare earth materials have increased global uncertainty and risk aversion. “Gold prospects remain strong due to geopolitical tensions as well as continued demand from investors seeking safety,” Trivedi said.
A strong rise in silver prices was also seen in the spot markets. According to the association, on Monday silver jumped by Rs 7,500 to reach a new record high of Rs 1,79,000 per kg (including all taxes). On Friday it closed at Rs 1,71,500 per kg.
In international markets, spot gold rose by nearly 2 percent to a new record high of $ 4,084.99 an ounce. Trivedi said, “Bullion prices have reached new and unprecedented levels, mainly due to strong festival demand and structural supply and liquidity constraints.
“This surge in gold is mainly due to rising investment interest against the backdrop of geopolitical tensions and solid accumulation by global central banks,” said Dilip Parmar, research analyst at HDFC Securities.
According to Parmar, traders believe the current secular bull market for precious metals is poised for continued growth, which will be sustained by both investment momentum and seasonal buying cycles. Spot silver in overseas markets rose nearly 3 percent to a new all-time high of $51.74 an ounce.
Jigar Trivedi, senior research analyst at Reliance Securities, said, “On Monday, silver jumped more than 2 percent to cross $ 51 an ounce, which is a new all-time high. This was due to US-China trade concerns, political instability and expectations of interest rate cuts in the US, which increased demand for safe haven assets.”
On Friday, US President Donald Trump threatened to impose additional 100 percent tariffs on Chinese goods from November 1 in response to Beijing’s new export controls on rare minerals.
However, Trump later signaled openness to talks ahead of a possible meeting with President Xi Jinping later this month, saying trade relations with China would be fine. “Meanwhile, expectations that the Federal Reserve will cut interest rates by 25 basis points later this month and again in December, coupled with a reduction in physical silver supplies in London, also boosted the white metal’s upside,” Trivedi said.
