Gold prices surged by ₹557 to ₹1,02,025 per 10 grams in Friday’s futures trade, driven by fresh positions from speculators amid robust spot demand. On the Multi Commodity Exchange, October gold contracts rose ₹557, or 0.55 per cent, to ₹1,02,025 per 10 grams, with a business turnover of 16,929 lots.
In the international market, Comex gold futures for December delivery slipped 0.07 per cent to $3,393.97 per ounce in New York.
The strong rally in the precious metal can be attributed to to strong safe-haven buying in the face of global uncertainty, increasing geopolitical tensions, and an anticipated rate cut by the U.S.
“ Adding to the uncertainty, the US has imposed tariffs on imports of one-kilo and 100-ounce gold bars, a decision set to disrupt the global bullion market and strike Switzerland, the top gold refining hub. According to a Customs Border Protection ruling letter dated July 31, the bars fall under a customs code subject to levies. One-kilo bars, the most traded format on Comex and the mainstay of Swiss bullion exports, are now hit with tariffs that could add $24 billion in costs based on last year’s $61.5 billion export volume. Switzerland’s 39% tariff rate took effect Thursday. This move has created fresh uncertainty in the market,” said Aksha Kamboj, VP, India Bullion & Jewellers Association (IBJA) and Executive Chairperson, Aspect Global Ventures.
Another key reason behind the rally is rising domestic demand for the festive and wedding season also favors high levels of prices. “ Indian investors remain long-term value stores and hedge against inflation and currency risks,” said Kamboj said.
Kamboj further added, “ Even as prices are at all-time highs, gold is still an essential element of diversification in a portfolio. One can adopt a staggered entry through SIPs in gold ETF or sovereign gold bonds to ride through volatility and still get long-term exposure. Any price correction because of short-term profit booking can prove to be a new entry point.”
Sugandha Sachdeva, Founder of SS WealthStreet, highlighted that a sharp depreciation in the Indian rupee to a record low of 88.10 against the US dollar amplified gold’s gains, as currency weakness boosts rupee-denominated returns.
“ Support also came from softer US labour market data released last week, which reinforced market expectations of a rate reduction by the US Fed in September,” Sachdeva said.
Gold prices – Is it right time to buy?
Sachdeva further went on to say that the trend in gold remains constructive from a technical perspective.
“ In the international market, $3,440 per ounce stands as a crucial resistance level, while $3,280 per ounce offers strong support. Price action in the coming week is likely to be influenced by further tariff-related developments and the upcoming US CPI data, which will shape expectations for US monetary policy,” she said.
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