New Delhi: Gold prices zoomed by Rs 2,430 to hit a lifetime high of Rs 88,500 per 10 grams in the national capital on Monday following firm global trends and a weak rupee, according to the All India Sarafa Association.
The precious metal breached the record USD 2,900 an ounce level in spot markets globally after US President Donald Trump announced imposition of fresh 25 per cent tariffs on all steel and aluminum imports to the US.
Heavy buying by jewellers and retailers also boosted the prices.
The precious metal of 99.9 per cent purity had settled at Rs 86,070 per 10 grams last week.
Gold of 99.5 per cent purity surged by Rs 2,430 to hit a record high of Rs 88,100 per 10 grams in the local markets.
Silver prices increased Rs 1,000 to Rs 97,500 per kg.
Investors are dumping riskier assets like stocks as they prefer safe haven amid global economic uncertainties, traders said.
In futures trade on the MCX, gold contracts for April delivery rallied Rs 940 to hit a new lifetime high of Rs 85,828 per 10 grams.
“Gold witnessed strong gains, surging above Rs 85,800 in MCX and hitting USD 2,900 in spot markets as Trump’s new round of tariffs on metal products intensified trade war concerns.
“With no specific clarity on which countries are included or excluded, uncertainty in global trade has driven significant bullion buying,” Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities, said.
The subseqent contract for June delivery surged Rs 1,015 or 1.18 per cent to hit a fresh peak of Rs 86,636 per 10 grams.
Silver futures for March delivery climbed Rs 632 to Rs 95,965 per kg on the Multi Commodity Exchange (MCX).
Globally, Comex gold futures appreciated by USD 45.09 per ounce or 1.56 per cent to hit a record high of USD 2,932.69 per ounce. Meanwhile, spot gold in the global markets breached the psychological level of USD 2,900-mark.
“Gold climbed to a new record high on Monday as fund flow increased towards the safe haven asset in response to President Trump’s latest declaration,” Saumil Gandhi, Senior Analyst of Commodities at HDFC Securities, said.
Comex silver futures in the Asian market hours rose nearly 1 per cent to USD 32.76 per ounce.
According to a report by Dutch multinational ING Bank, gold has already hit a series of fresh record highs this year. Tariff concerns that risk higher inflation and slower economic growth are spurring demand for safe haven assets.
The precious metal prices will hit more record highs this year, with USD 3,000 per ounce now in sight, it said.
Action to be taken if gold auction norms violated by banks, NBFCS: FM
Finance Minister Nirmala Sitharaman on Monday said action will be taken in case there are violations of well laid down processes for auctioning of gold by banks and NBFCs when a borrower fails to pay the gold loan.
During Question Hour in Lok Sabha, she said Non Banking Financial Companies (NBFCs) and Scheduled Commercial Banks (SCBs) are guided by similar rules.
There are very well laid down and tight processes in place for auctioning of gold by NBFCs and banks in case a borrower fails to pay the gold loan. These processes are followed by NBFCs and banks, she told Lok Sabha.
There is a process for giving enough number of notices to bank account holders to say their servicing is not up to the mark. In the eventuality of a borrower not coming back to pay, the bank or NBFC will be forced to go for an auction, the minister said.
Sitharaman stressed that even while going for an auction, there are very well laid out procedures and tight processes.
“… if these processes are violated, indeed it is for us to act on but processes are… followed by the banks… I think if there are specific instances where laid out norms are violated, I am quite willing to take the details and act on it,” she said.
The minister was responding to questions from DMK leader Kanimozhi Karunanidhi regarding auctioning of gold by entities when there are defaults on gold loan repayments.
Replying to a query from Congress leader Manish Tewari, the finance minister said demand for gold in India has not come down and on the contrary, it is going up.
“It is very typical of India, particularly for households, small businesses… to invest in gold for they think it is far more secure and liquid. As an asset class, we see that sustained interest by households and small businesses as much as women of India,” she added.
