Gold trades at record $1,903
In India, too, the precious metal climbs a new peak — ~50,919 per 10 gram
The price of gold reached an alltime high in both domestic and international spot markets on Wednesday. The yellow metal breached the $1,900-mark globally and was trading at $1,902.93 an ounce (until 8.34 pm IST) — nearly $3 more than the record closing of 1,900.2 nine years ago on September 5. Intraday, the metal went as high as $1,921 per ounce on September 6, 2011.
In Mumbai’s Zaveri Bazar, standard gold closed 0.8 per cent up at a new peak of ~50, 919 per 10 gram. Silver closed 1.5 per cent lower at ~59,885 a kg, but internationally, the metal was 0.93 per cent up at $22.79 an ounce.
In the futures market, too, gold was at an all-time high. August futures of the metal was trading at $1,901.10 an ounce (until 8.38 pm IST) on US Comex, against Thursday’s record closing of $1,890 (the previous high of $1,888.7 was recorded on August 22, 2011). On India’s MCX, the rate for August 5 futures was ~50,993 per 10 gram after climbing a record high of ~51,150.
“When interest rates are zero or near zero, then gold is an attractive medium to have because you don’t have to worry about not getting interest on your gold and you see the gold price will rise as uncertainty in the markets are rising,” Mark Mobius, co-founder at Mobius
Capital Partners, said in a Bloomberg TV interview. “I would be buying now and continue to buy.”
The latest surge in the price of this safe haven commodity comes on the back of China asking the US to shut its consulate in Chengdu, while retaliating the Trump administration demand that the Asian giant closes its Houston consulate. The weakening of the dollar index and the disappointing US jobless data supported the rally in the metal.
Gnanasekar Thiagarajan (CEO), Commtrendz Risk Management Services, said: “Gold and silver (which was trading at ~61,496 kg on the MCX for
September 4 futures) have been buoyed mostly because of the increasing rift between the US and China and a substantially large stimulus package from the EU. Also, in the US, there are talks of further stimulus. In such a scenario, asset prices are expected to rise and result in a jump in inflation. And a proven inflation hedge is gold. Silver, too, is preferred as a cheaper alternative to gold. Besides, base metal and energy prices are still struggling at high prices due to lack of demand.” He said the current momentum would continue for some months, interjected by some profit-bookings.
Jewellers, however, appeared cautious. One of them said the market is overbought and can correct once the all-time high target is achieved. Rising gold short positions and lower net long positions on the Commodity Futures Trading Commission for the last four weeks also point to overbought positions. Gold short positions were at a four-week high of 41,543 lots on July 17. Profit-booking is expected to be sharp and soon. Tapan Patel, senior commodity analyst at HDFC securities, said: “We expect the gold to trade up, with resistance at $1,920 and support at $1,885.”