New Delhi: Gold prices in India touched a new record high of Rs 96,805 per 10 grams on Monday on the Multi Commodity Exchange (MCX) as rising fears over a global trade war and weakness in the US dollar pushed investors towards the yellow metal.
Around 1:30 pm, the ‘MCX Gold June 5’ contract was trading 1.65 per cent higher at Rs 96,830 per 10 grams. Spot gold prices in India also surged. According to the India Bullion and Jewellers Association (IBJA), the fine gold (999 purity) was priced at Rs 9,659 per gram, while 22-carat gold stood at Rs 9,427.
The rates for 20-carat and 18-carat were Rs 8,596 and Rs 7,824 per gram, respectively. The sharp rally in domestic prices mirrored international trends, where spot gold also hit a new all-time high of $3,384 per ounce.
Investors across the world are seeking safe-haven assets due to the growing tensions between the United States and China. Another factor supporting gold prices is the weakening of the US dollar. The dollar index hit a three-year low, making gold more attractive for investors holding other currencies.
Since gold is priced in dollars, a weaker dollar makes it cheaper for buyers in other countries — boosting its demand. In the previous trading session, MCX gold had slipped 0.44 per cent to Rs 95,239 per 10 grams due to profit booking. However, the ongoing concerns over a possible prolonged trade war triggered fresh buying at lower levels.
“Gold prices continued their positive momentum and have risen briefly above $3,400 per ounce. Uncertainty around trade tariffs, a weaker US dollar, and rising US bond yields are keeping bullion prices strong,” said Pranav Mer of JM Financial Services Limited. He added that buying interest from exchange-traded funds (ETFs) and upcoming festive demand in India are also lending support to gold prices.
“Traders will also keep an eye on the ongoing trade talks between the US and its major partners like Japan, the Eurozone, and China, which could give more clarity to the market direction,” Mer added. On the technical front, gold prices now hold support at Rs 95,550 and then at Rs 94,200, while the next resistance levels are seen at Rs 97,580 and Rs 98,200, Mer mentioned.