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Gold prices soar globally, at all-time high in India

The yellow metal touched a record high of Rs 34,470 per 10 gram, a gain of over Rs 200.

Jun 26, 2019, 08.03 AM IST
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(This story originally appeared in on Jun 26, 2019)
Gold has regained its lustre after a long time on the back of escalating tensions between the US and Iran, the ongoing trade war and dovish stance of central banks.

The yellow metal touched a record high of Rs 34,470 per 10 gram, a gain of over Rs 200, in Delhi on Tuesday. In Mumbai, it closed at Rs 34,588, with the futures market prices suggesting a marginal rise. Gold commanded a price of Rs 34,700 on MCX, indicating an upswing from current levels, with commodity market trackers expecting prices to head northwards for some time.

Internationally, the metal hit $1,439.7 an ounce on Tuesday, the highest level since September 2013, with a softer dollar lending additional support. It is expected to continue the upward trend.

Gold is expected to continue its rise as large central banks favour a cut in interest rates to counter signs of a slowdown in several economies, Kishore Narne, head of commodity and currencies at Motilal Oswal Financial Services, said.

Gold is seen as a safe haven among big investors as several large economies, such as the US, China, Eurozone, England and India, have indicated a low interest rate regime, Pritam Kumar Patnaik, head-commodities, Reliance Commodities, said. The other major reason for rising gold prices is the heightened geo-political tension across the world and the trade war between the US and China, which have prompted several large economies to shift their reserves from US dollar to gold, said Narne. This has provided support to rising prices.

Against a purchase of 77.4 tons of gold in 2013, the Russian Central Bank bought 274 tons of yellow metal in 2018 to diversify its reserve away from the dollar. According to a report by Motilal Oswal, China has boosted its gold reserve by adding around 50 tons in 2019. The other notable central banks which are investing in the precious metals are Turkey (40 tons), Kazakhastan (11.2 tons), Qatar (9.4 tons) and India (8.4 tons).

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