Kolkata: Gold prices are showing no signs of consolidation. Last week, between August 25 and August 29, prices of the yellow metal rose to new peaks and stayed above the psychologically important Rs 100,000 per 10 gm level for the entire week for both the 999 and 995 variety. While the spot prices showed the peak gold prices as Rs 102,388 (IBJA data), on the MCX the futures prices rose to Rs 1,04,090 per 10 grams.
Gold prices last week
Gold 999
August 25: Rs 100,345 (opening); Rs 100,488 (closing)
August 26: Rs 100,827 (opening); Rs 100,884 (closing)
August 27: Market holiday
August 28: Rs 101,239 (opening); Rs 101,506 (closing)
August 29: Rs 102,089 (opening); Rs 102,388 (closing)
Gold 995
August 25: Rs 99,943 (opening); Rs 100,086 (closing)
August 26: Rs 100,423 (opening); Rs 100,480 (closing)
August 27: Market holiday
August 28: Rs 100,834 (opening); Rs 101,100 (closing)
August 29: Rs 101,680 (opening); Rs 101,978 (closing)
Source: IBJA (India Bullion and Jewellers Association)
Gold prices rose in the global markets too. Comex gold futures for the December contract settled 1.20% up at $3,530.70 per ounce on August 30. It was very close to the peak level of $3,534.10 per ounce.
Tariff tension
The rise in gold prices was attributed to tariff-related tension and the valuation of the US Dollar. On August 27, the US tariffs of 50% kicked in and there was no sign of the resolution of the imbroglio. While US President Donald Trump refused to climb down, an US appeals court ruled that most of the tariffs are illegal. It goes without saying that all eyes will be on the movement of the tariff question in the US courts where this administrative step will come under intense scrutiny. If the next rounds of judicial scrutiny upholds the view of the appeals court, it could be a ray of hope for the entire economy.
However, the US dollar kept displaying weakness against other currencies and it also helped prop up the gold prices. On another front, however, the Indian rupee kept sinking against the greenback and settled at 88.09 against the US currency. The weak rupee is also putting an upward pressure on the price of gold.
New signals to watch out for
Analysts were of the opinion that traders will watch out for US non-farm payrolls report which will come on September 5. This data, in turn, could signal whether the US Fed can decide to slash key interest rates in its meeting on September 16-17.
“In the week ahead, focus will be on the manufacturing/services PMI data from across regions and the US employment data. Festive demand in India and uncertainty over the Russia-Ukraine peace deal as well as straining India-US relations, will also drive market sentiment,” Pranav Mer, vice president, EBG — commodity & currency research, JM Financial Services was quoted by PTI as saying.
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