Due to strong physical demand and strong trend in the global market, gold prices in the capital Delhi on Wednesday increased by Rs 1,900 and reached a two-week high of Rs 1.49 lakh per 10 grams. According to All India Bullion Association, the price of gold of 99.9 percent purity increased by Rs 1,900 to Rs 1,49,600 per 10 grams (including all taxes).
On Tuesday it closed at Rs 1,47,700 per 10 grams. On July 7, the price of gold in the local market was Rs 1,49,250 per 10 grams. On the other hand, after six consecutive sessions of decline, silver improved and its price increased by Rs 8,500 to Rs 2,30,000 per kg (including all taxes). In the last session, silver had closed at Rs 2,21,500 per kg.
Traders said that the rise of gold continued for the third consecutive session due to strong prices in the foreign market, increased physical demand again and value buying after last week’s decline. Saumil Gandhi, Senior Analyst, Commodities, HDFC Securities, said that on Wednesday, gold prices rose due to positive signals from the global market and after improvement in physical demand, prices reached the highest level in two weeks. He said that this rally was also supported by value buying and new investments in exchange-traded funds (ETFs), which reflects the improving sentiment of investors after the recent decline.
Gold and silver in foreign markets
Globally, spot gold was trading $47.43 or 1.16 per cent higher at $4,125.24 an ounce and silver was up nearly 1 per cent at $59.32 an ounce. Kainaat Chenwala, AVP Commodity Research, Kotak Securities, said that spot gold hit a two-week high of USD 4,140 an ounce in intraday trade, while silver touched near USD 60. Despite rising tensions in West Asia and crude oil prices remaining at a five-week high, both metals witnessed a rise. According to Chenwala, US Secretary of State Marco Rubio has reduced expectations of diplomatic success by saying that Washington is ready for talks, but Tehran is not serious about talks, due to which investors are in a ‘wait and see’ situation. He said that bullion trading remains influenced by expectations related to monetary policy and traders are keeping a close eye on the Federal Reserve Open Market Committee meeting to be held next week.
Will prices increase further?
The minutes of the June meeting revealed that US policy makers are slightly more inclined in favor of another increase in interest rates. Nine officers were in favor of the increase and eight were in favor of maintaining the status quo. This indicates that until there is more clarity regarding the policy, the gains in precious metals may remain limited. Praveen Singh, head of commodities at Mirae Asset Sharekhan, said bullion was supported by three main factors. In which US-Iran peace talks are expected to resume soon; This includes a revival in demand for precious metals and the potential for gold to remain above USD 4,000 per ounce following the re-imposition of tariffs by the Trump administration.
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